Brazil´s Biofuel Drama Goes Global

by Eric Ehrmann (Huffington Post) Speculators hedging uncertainty in world energy markets are again making renewable fuels derived from corn, cane sugar and soybeans the drivers of food price inflation, just as they did on the eve of the 2008 economic crisis.
With G-20 nations currently meeting in Buenos Airesto discuss controlling volatile commodities, Brazil has dropped prices 25% on pure E-100 ethanol, claiming fresh supplies from the current cane sugar harvest are taking pressure off the market. But government efforts to get major gasoline companies to reduce prices on gasoline-ethanol blends (E-18 and E-25) resulted in a cutback of only six percent.
...Brazilian sugar ethanol increased in price 123% last year, shadowing price hikes in barrel oil. World Bank president Robert Zoellick, meanwhile, says world food prices have increased 36% over the past year and speculators hedging instability in oil nations factor into the rise.
...Derivatives traders, hedge fund operators and banks, detached from the social costs of food price inflation, have no qualms about speculating. According to the Daily Telegraph of London, Barclays Bank makes half a billion dollars a year speculating on food prices, and they are not the only bank who engages in such operations. READ MORE