Biofuels Seen As A Luxury China Cannot Afford - Food Needs Too Great - AFP

[hatrack]

China cannot afford to embark on industrial production of grain-derived biofuels because supplies of corn and other crops are needed to feed the country's 1.3 billion people. "It would be a disaster for us if we depend on a huge amount of corn and other grains for energy," said Zhai Huqu, president of the Chinese Academy of Agricultural Sciences, in comments quoted by the official China Daily.

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Vice Finance Minister Zhu Zhigang said biofuels should only be produced once the supply of grain exceeded demand, the newspaper reported. "The government will impose strict controls on any biofuel project using grain as the raw material," Zhu said.

Ethanol is the main biofuel produced in China, with output hitting 1.02 million tons last year. Corn accounted for 76 percent of the raw material, with wheat and sorghum providing the rest. Prices of corn, soy and wheat have approached record highs in recent weeks as investors from China and globally seek to cash in on increasing demand in the world's most populous country for biofuel.

"We predict that agricultural products will be as hot as petroleum in the future," the China Daily quoted a dealer from the Dalian Commodity Exchange as saying last week. The increases also are due to growing meat consumption in China, which requires the use of more grain as livestock feed, state media have said.

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http://sg.biz.yahoo.com/061212/1/45ei0.html

[SlipperySlope]

1. Well, duh.

Any program that redirects food suitable for human consumption into the production of fuels is only going to reduce the supply of food while increasing the cost of food. What is the surprise?

[aquart]

2. I wouldn't worry about the agricultural products.

Whole lotta stuff ain't gonna grow in the new world climate.

Which will, of course, create that famine they're worrying about.