Crop prices soar – biofuels blamed
There is a sobering article on the front page of the Wall Street Journal (subscription only) today titled Crop Prices Soar, Pushing Up Cost of Food Globally. Here is an excerpt from the story:
One of the chief causes of food-price inflation is new demand for ethanol and biodiesel, which can be made from corn, palm oil, sugar and other crops. That demand has driven up the price of those commodities, leading to higher costs for producers of everything from beef to eggs to soft drinks. In some cases, producers are passing the costs along to consumers. Several years of global economic growth — led by China and India — is also raising food consumption, further fanning the inflationary pressures.
Food-price inflation has been climbing — in some cases sharply — in India, China, Europe, and even smaller economies like Turkey, South Africa and Poland. In Hungary, it is running at more than 13% a year, compared with less than 3% in 2005. In China, food prices are climbing at a 6% pace, more than three times the speed of a year ago. Prices are also up in Germany, Italy and the United Kingdom. They may even be picking up in Japan, the world’s second-largest national economy, though the signs are tentative since overall prices there are only just starting to rise after a prolonged economic downturn.
Go read the article. Think about whether or not biofuels are a smart or moral path for the future.
