Food, fuel, and prices

The NYT has a sad (though amusing) story this morning about the unintended (but inevitable) consequence of using food for fuel: the price goes up.

The starchy cassava root has long been an important ingredient in everything from tapioca pudding and ice cream to paper and animal feed.

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.

Perhaps you've never topped off a meal with tapioca pudding. It was a staple in our house in the 1940s, because it was cheap. Similarly, people throughout the southern hemisphere dine on cassava root the way we in the north eat potato, because it's a good source of starch and is--or used to be--cheap. No longer! Like children discovering the human hands that animate the puppet show, the New York Times discovers a law of economics: increased demand leads to higher prices.

But with food prices rising sharply in recent months, 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.

Gosh, imagine that. Blue skies! -- Dan Ford