Wednesday, April 16, 2008

Creation of ethanol and biodiesel = 3rd world starvation

I bet that you have missed the most telling statistic. At 2.1bn tonnes, the global grain harvest broke all records last year - it beat the previous year's by almost 5%. The crisis, in other words, has begun before world food supplies are hit by climate change. If hunger can strike now, what will happen if harvests decline?

There is plenty of food. It is just not reaching human stomachs. Of the 2.13bn tonnes likely to be consumed this year, only 1.01bn, according to the United Nation's Food and Agriculture Organisation, will feed people. From this morning all sellers of transport fuel in the United Kingdom will be obliged to mix it with ethanol or biodiesel made from crops. The World Bank points out that "the grain required to fill the tank of a sports utility vehicle with ethanol ... could feed one person for a year". This year global stockpiles of cereals will decline by around 53m tonnes; this gives you a rough idea of the size of the hunger gap. The production of biofuels will consume almost 100m tonnes, which suggests that they are directly responsible for the current crisis.

Thursday, April 10, 2008

International Monetary Fund - one-in-four chance of a full-blown global recession

The US mortgage crisis has spiralled into "the largest financial shock since the Great Depression". With the US sliding into a recession, there is mounting pessimism about the ability of the rest of the world to escape unscathed. The IMF shaved its forecast for growth in the global economy by half a percentage point, to 3.7% for this year, and by 0.6% - to 3.8% - for 2009.

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