Food crisis antagonised by US biofuel mandates

The construction of corn ethanol plants in the US has slowed slightly in recent months but with oil prices reaching $112/barrel the increased incentive to produce ethanol will further encourage green field plants. The US’s increased biofuel inclusing targets will promote even stronger demand for ethanol. Construction of corn based ethanol plants will no doubt pick up pace again.

Removal of the 54cts/gallon import tariff will allow cheaper ethanol from other countries access to the US. Much of the cheaper ethanol is based on sugar cane – a more efficient crop than corn and with a lower impact to food prices.

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