Food vs Fuel

 

The world turned towards the US on the topic of food vs energy, a debate that is going strong as a primary cereal for food, feed and fuel production is growing thin.

The FT reports [registering may be required to view in full]:
UN urges US to cut ethanol production

Some highlights:

  • As America exports nearly half the world’s corn, a third of the world’s soyabeans and up to a fifth of the world’s wheat, changes in US supply have a significant impact on global agricultural markets.

However, the matter is not so simple, as suddenly reducing alternative energy sources may have a negative impact on oil prices and subsequently even greater economical consequences than the higher cereal prices currently experienced. However, the already high price of corn may have a natural impeding effect on the production of ethanol.

More on the topic:

The Global Renewable Fuels Alliance response

Ethanol production slows

Drought drives FAO food price index up

 

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