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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (11924)	11/27/2006 11:06:33 AM
From: elmatador	Respond to of 218055

Global ethanol production is driving up prices for food commodities, from feed stocks such as sugar, to meat, said Datagro, Brazil's biggest sugar-industry forecasting firm. Ethanol Drives Up Food Commodity Prices, Datagro Says (Update1) By Marianne Stigset Nov. 22 (Bloomberg) -- Global ethanol production is driving up prices for food commodities, from feed stocks such as sugar, to meat, said Datagro, Brazil's biggest sugar-industry forecasting firm. U.S. production, forecast to increase more than 70 percent by 2012, will use 37 percent of the country's current corn supply to meet output needs, up 15 percent from 2006, Datagro said. Land for soy oilseeds is increasingly being diverted to grow corn, reducing soy supply and driving up animal feed prices, according to the company. In China, competing demand for corn from the food and ethanol industries may lead the country to reduce exports and become a corn importer, Datagro said. ``World sugar, meat, corn, soy and wheat are becoming more interdependent with ethanol,'' Plinio Nastari, president of Datagro, said today at an International Sugar Organization seminar in London. Demand for biofuels made from plants such as corn, palm oil and sugar is growing amid efforts by nations including the U.S. to reduce reliance on oil, gas and coal. Some governments are also trying to limit carbon emissions and assist farming. In the U.S., ethanol production is forecast to increase to 34 billion liters by 2012, from an estimated 19.7 billion liters in 2006, according to Datagro. While the country has sufficient land, it will be limited by water availability, Nastari said, citing the depletion of the Ogallala aquifer, the largest U.S. groundwater reservoir. Still, arable land is being used to grow corn for biofuels. `Ethanol Frenzy' ``The ethanol frenzy is the main factor behind the recovery in soy and meat prices,'' said Nastari. Soybean futures rose 5.25 cents, or 0.8 percent, to $6.7825 in Chicago yesterday. Prices reached $6.8325 on Nov. 8, the highest since August 2005, and have gained 17 percent in the past year. Energy prices may increasingly affect the price of sugar, as shown by the increasing correlation between the sweetener and crude oil. Between 2004 and 2006, the correlation between the two rose 85 percent, Nastari said. World ethanol production is forecast to total 34.5 million liters in 2006, representing 3 percent of global demand for gasoline, according to Datagro. To contact the reporter on this story: Marianne Stigset in London at mstigset@bloomberg.net .