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Friday, April 08, 2011
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Balancing Biofuels and Food Prices

By Susanne Stahl

New York Times reporter Elizabeth Rosenthal wrote a piece this week outlining the complexities in the relationship between biofuel production and food prices. "The starchy cassava root has long been an important ingredient in everything from tapioca pudding and ice cream to paper and animal feed," she writes. "But last year, 98 percent of cassava chips exported from Thailand, the world’s largest cassava exporter, went to just one place and almost all for one purpose: to China to make biofuel. Driven by new demand, Thai exports of cassava chips have increased nearly fourfold since 2008, and the price of cassava has roughly doubled."

With food prices rising sharply in recent months, she continues, "many experts are calling on countries to scale back their headlong rush into green fuel development, arguing that the combination of ambitious biofuel targets and mediocre harvests of some crucial crops is contributing to high prices, hunger and political instability."

No one is suggesting abandoning biofuels, but some food experts suggest countries revise their policies so that fuel mandates can be suspended when food stocks get low or prices become too high. "It can be tricky predicting how new demand from the biofuel sector will affect the supply and price of food," Rosenthal writes. "Sometimes, as with corn or cassava, direct competition between purchasers drives up the prices of biofuel ingredients. In other instances, shortages and price inflation occur because farmers who formerly grew crops like vegetables for consumption plant different crops that can be used for fuel."

Read the full article here.

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