How long before we end the idiotic ethanol subsidy? Joel
At 08:20 AM 1/19/08 -0500, you wrote: >What happens when you grow fuel rather than food. > >Jon > >================================================================== > >The New York Times >January 19, 2008 >The Food Chain >An Oil Quandary: Costly Fuel Means Costly Calories >By KEITH BRADSHER > >KUANTAN, Malaysia -- Rising prices for cooking oil are forcing >residents of Asia's largest slum, in Mumbai, India, to ration >every drop. Bakeries in the United States are fretting over higher >shortening costs. And here in Malaysia, brand-new factories built >to convert vegetable oil into diesel sit idle, their owners unable >to afford the raw material. > >This is the other oil shock. From India to Indiana, shortages and >soaring prices for palm oil, soybean oil and many other types of >vegetable oils are the latest, most striking example of a >developing global problem: costly food. > >The food price index of the Food and Agriculture Organization of >the United Nations, based on export prices for 60 internationally >traded foodstuffs, climbed 37 percent last year. That was on top >of a 14 percent increase in 2006, and the trend has accelerated >this winter. > >In some poor countries, desperation is taking hold. Just in the >last week, protests have erupted in Pakistan over wheat shortages, >and in Indonesia over soybean shortages. Egypt has banned rice >exports to keep food at home, and China has put price controls on >cooking oil, grain, meat, milk and eggs. > >According to the F.A.O., food riots have erupted in recent months >in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and >Yemen. > >"The urban poor, the rural landless and small and marginal farmers >stand to lose," said He Changchui, the agency's chief >representative for Asia and the Pacific. > >A startling change is unfolding in the world's food >markets. Soaring fuel prices have altered the equation for growing >food and transporting it across the globe. Huge demand for >biofuels has created tension between using land to produce fuel >and using it for food. > >A growing middle class in the developing world is demanding more >protein, from pork and hamburgers to chicken and ice cream. And >all this is happening even as global climate change may be >starting to make it harder to grow food in some of the places best >equipped to do so, like Australia. > >In the last few years, world demand for crops and meat has been >rising sharply. It remains an open question how and when the >supply will catch up. For the foreseeable future, that probably >means higher prices at the grocery store and fatter paychecks for >farmers of major crops like corn, wheat and soybeans. > >There may be worse inflation to come. Food experts say steep >increases in commodity prices have not fully made their way to >street stalls in the developing world or supermarkets in the West. > >Governments in many poor countries have tried to respond by >stepping up food subsidies, imposing or tightening price controls, >restricting exports and cutting food import duties. > >These temporary measures are already breaking down. Across >Southeast Asia, for example, families have been hoarding palm >oil. Smugglers have been bidding up prices as they move the oil >from more subsidized markets, like Malaysia's, to less subsidized >markets, like Singapore's. > >No category of food prices has risen as quickly this winter as >so-called edible oils -- with sometimes tragic results. When a >Carrefour store in Chongqing, China, announced a limited-time >cooking oil promotion in November, a stampede of would-be buyers >left 3 people dead and 31 injured. > >Cooking oil may seem a trifling expense in the West. But in the >developing world, cooking oil is an important source of calories >and represents one of the biggest cash outlays for poor families, >which grow much of their own food but have to buy oil in which to >cook it. > >Few crops illustrate the emerging problems in the global food >chain as well as palm oil, a vital commodity in much of the world >and particularly Asia. From jungles and street markets in >Southeast Asia to food companies in the United States and >biodiesel factories in Europe, soaring prices for the oil are >drawing environmentalists, energy companies, consumers, indigenous >peoples and governments into acrimonious disputes. > >The oil palm is a stout-trunked tree with a spray of frilly fronds >at the top that make it look like an enormous sea anemone. The >trees, with their distinctive, star-like patterns of leaves, cover >an eighth of the entire land area of Malaysia and even greater >acreage in nearby Indonesia. > >An Efficient Producer > >The palm is a highly efficient producer of vegetable oil, squeezed >from the tree's thick bunches of plum-size bright red fruit. An >acre of oil palms yields as much oil as eight acres of soybeans, >the main rival for oil palms; rapeseed, used to make canola oil, >is a distant third. Among major crops, only sugar cane comes close >to rivaling oil palms in calories of human food per acre. > >Palm oil prices have jumped nearly 70 percent in the last year >because supply has grown slowly while demand has soared. > >Farmers and plantation companies are responding to the higher >prices, clearing hundreds of thousands of acres of tropical forest >to replant with rows of oil palms. But an oil palm takes eight >years to reach full production. A drought last year in Indonesia >and flooding in Peninsular Malaysia helped constrain >supply. Worldwide palm oil output climbed just 2.7 percent last >year, to 42.1 million tons. > >At the same time, palm oil demand is growing steeply for a variety >of reasons around the globe. They include shifting decisions among >farmers about what to plant, rising consumer demand in China and >India for edible oils, and Western subsidies for biofuel >production. > >American farmers have been planting more corn and less soy because >demand for corn-based ethanol has pushed up corn prices. American >soybean acreage plunged 19 percent last year, producing a drop in >soybean oil output and inventories. > >Chinese farmers also cut back soybean acreage last year, as urban >sprawl covered prime farmland and the Chinese government provided >more incentives for grain. > >Yet people in China are also consuming more oils. China not only >was the world's biggest palm oil importer last year, holding >steady at 5.2 million tons in the first 11 months of the year, but >it also doubled its soybean oil imports to 2.9 million tons, >forcing buyers elsewhere to switch to palm oil. > >Concerns about nutrition used to hurt palm oil sales, but they are >now starting to help. The oil was long regarded in the West as >unhealthy, but it has become an attractive option to replace the >chemically altered fats known as trans fats, which have lately >come to be seen as the least healthy of all fats. > >New York City banned trans fats in frying at food service >establishments last summer and will ban them in bakery goods this >summer. Across the country, manufacturers are trying to replace >trans fats. American palm oil imports nearly doubled in the first >11 months of last year, rising by 200,000 tons. > >"Four years ago, when this whole no-trans issue started, we >processed no palm here," said Mark Weyland, a United States >product manager for Loders Croklaan, a Dutch company that supplies >palm oil. "Now it's our biggest seller." > >Last year, conversion of palm oil into fuel was a fast-growing >source of demand, but in recent weeks, rising prices have thrown >that business into turmoil. > >Here on Malaysia's eastern shore, a series of 45-foot-high green >and gray storage tanks connect to a labyrinth of yellow and silver >pipes. The gleaming new refinery has the capacity to turn 116,000 >tons a year of palm oil into 110,000 tons of a fuel called >biodiesel, as well as valuable byproducts like glycerin. Mission >Biofuels, an Australian company, finished the refinery last month >and is working on an even larger factory next door at the base of >a jungle hillside. > >But prices have spiked so much that the company cannot cover all >its costs and has idled the finished refinery while looking for a >new strategy, such as asking a biodiesel buyer to pay a price >linked to palm oil costs, and someday switching from palm oil to >jatropha, a roadside weed. > >"We took a view that palm oil prices were already high; we didn't >think they could go even higher, and then they did," said Nathan >Mahalingam, the company's managing director. > >Growth in Biofuels > >Biofuels accounted for almost half the increase in worldwide >demand for vegetable oils last year, and represented 7 percent of >total consumption of the oils, according to Oil World, a >forecasting service in Hamburg, Germany. > >The growth of biodiesel, which can be mixed with regular diesel, >has been controversial, not only because it competes with food >uses of oil but also because of environmental concerns. European >conservation groups have been warning that tropical forests are >being leveled to make way for oil palm plantations, destroying >habitat for orangutans and Sumatran rhinoceroses while also >releasing greenhouse gases. > >The European Union has moved to restrict imports of palm oil grown >in unsustainable ways. The measure has incensed the Malaysian palm >oil industry, which had plunged into biofuel production in part to >satisfy European demand. > >Another controversy involves the treatment of indigenous peoples >whose lands have been seized by oil plantations. This has been a >particular issue on Borneo. > >Anne B. Lasimbang, executive director of the Pacos Trust in the >Malaysian state of Sabah in northern Borneo, said that while some >indigenous people had benefited from selling palm oil that they >grow themselves, many had lost ancestral lands with little to show >for it, including lands that used to provide habitats for >endangered orangutans. > >"Finally, some of the pressures internationally have trickled >down. Some of the companies are more open to dialogue; they want >to talk to communities," said Ms. Lasimbang, a member of the Dusun >indigenous group. "On our side, we are still suspicious." > >Demand Outstrips Supply > >As the multiple conflicts and economic pressures associated with >palm oil play out in the global economy, the bottom line seems to >be that the world wants more of the oil than it can get. > >Even in Malaysia, the center of the global palm oil industry for >half a century, spot shortages have cropped up. Recently, as >wholesale prices soared, cooking oil refiners complained of >inadequate subsidies and cut back production of household oil, >sold at low, regulated prices. > >Street vendors in the capital, Kuala Lumpur, complain that they >cannot find enough cooking oil to prepare roti canai, the >flatbread that is the national snack. "It's very difficult; it's >hard to find," said one vendor who gave only his first name, >Palani, after admitting that he was secretly buying cooking oil >intended for households instead of paying the much higher price >for commercial use. > >Many of the hardest-hit victims of rising food prices are in the >vast slums that surround cities in poorer Asian nations. The Kawle >family in Mumbai's sprawling Dharavi slum, a household of nine >with just one member working as a laborer for $60 a month, is >coping with recent price increases for palm oil. > >The family has responded by eating fish once a week instead of >twice, seldom cooking vegetables and cutting its monthly rice >consumption. Next to go will be the weekly smidgen of lamb. > >"If the prices go up again," said Janaron Kawle, the family >patriarch, "we'll cut the mutton to twice a month and use less >oil." > >-- > >Contributing reporting were Andrew Martin in New York, Anand >Giridharadas in Kale, India, and Michael Rubenstein in Mumbai. > > >_______________________________________________ >RSS, archives, subscription & listserv information for: >[email protected] >http://lists.mutualaid.org/mailman/listinfo/sustainabletompkins >free hosting by http://www.mutualaid.org _______________________________________________ RSS, archives, subscription & listserv information for: [email protected] http://lists.mutualaid.org/mailman/listinfo/sustainabletompkins free hosting by http://www.mutualaid.org
