Thursday, July 10, 2008

Biofuels, Food, Red Herrings Redux.


In my prior posting, I opined that all this talk about biofuel production being behind the radical increase in food prices is bs.

Seems I've been taken to task on this point of view, and been handed some further reading for consideration.

So, my opinion has shifted some. I stand by my initial concept, but there are things I didn't consider. I do tend to oversimplify. So;

Seems the IMF has their own take, and bit more research than I. And while I don't trust the IMF *at all* in these things, they have some pretty interesting things to say;



China has accounted for about one-quarter of
global growth; Brazil, China, India, and Russia
for almost one-half; and all the emerging and
developing economies together for about two-
thirds, compared with about one-half in the
1970s (Figure 1.10). Growth in these economies
also is more resource-intensive, given their
patterns of production and consumption (see
Chapter 5 of the September 2006 World Economic
Outlook). One consequence of these trends is
that the increasing demand for key commodities
such as oil, metals, and foodstuffs is now driven
by growth in these economies—they account for
more than 90 percent of the rise in consump-
tion of oil products and metals and 80 percent
of the rise in consumption of grains since 2002
(with biofuels representing most of the remain-
der). This has contributed to the sustained
strong increase in commodity prices observed
over the past year, despite moderating growth
in the advanced economies, and has been an
important factor behind the strong recent per-
formance of commodity-exporting countries in
Africa and Latin America, as well as oil export-
ers in the Middle East.

Well, there you are then.


Again, I'll restate, though somewhat more meekly, that commodity trading is the real culprit here, but in real terms, this hardly matters. A lot of ag resources are being expended toward biofuel production, and while the feedstocks are not food per-say, the resources could be directed toward food production.

Which begs a whole 'nuther bag o-beans.

If you haven't seen King Corn yet, I recommend it most heartily.

And Now,

For the BS'er of the Month Award, I present the
Corn Refiners Association.

be sure the read

yeah guys, right.

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