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UPDATE 1-ADM to restart ethanol production at 2 mills as demand rises

(Adds background, details on restart)

April 1 (Reuters) - Archer Daniels Midland said on Thursday it would restart ethanol production at two of its U.S. corn dry mills this year, as the grains trader expects demand for the biofuel to rebound from a pandemic-led slump.

The company had last April decided to temporarily idle ethanol production at its facilities in Cedar Rapids, Iowa, and Columbus, Nebraska due to lower gasoline demand.

Demand for corn-based ethanol, blended into gasoline, is set to rise as people are expected to start driving more as COVID-19 vaccinations gather pace and as China imports more volumes, ADM said in a statement posted on its website.

The commodities trader also said ethanol sales would get a boost from steadily declining global inventories and the U.S. Environmental Protection Agency’s support for a strong renewable fuel standard, under which refiners have to blend biofuels into gasoline and diesel or buy credits.

"We've been carefully monitoring a wide variety of industry ethanol conditions, and in recent weeks, we've seen consistent signs pointing to accelerating demand for domestic ethanol," ADM said. (bit.ly/3cHvRSU)

ADM expects initial ethanol deliveries for customers by mid-April and said it would ramp up production to full capacity at the two facilities by late spring to meet demands of the spring and summer driving season. (Reporting by Arathy S Nair in Bengaluru; Editing by Ramakrishnan M.)

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