Friday, May 18, 2007

Biofuels driving up the price of corn

The Mesoamerican Food Security Early Warning System (MFEWS) has alerted that high corn prices and shortages will affect lower-income families in Guatemala from June to August, a time when the second harvest of the year has not even begun.

The cause is cited as the demand for ethanol production in the States, which has pushed the price of a bushel of corn from $4 to $8. Ethanol producers have consumed 86 million metric tons, 5 million over the figure originally projected. Rather than importing ethanol from Guatemala where it can be more efficiently produced from sugar, the good people of states like Iowa are obstinately trying to go it alone.

Local grain prices in Guatemala are also increasing, and as many farmers believe this is a trend that will continue, they are making substantial purchases of animal fodder, which may further affect the price and availability of corn for human consumption.

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