Tuesday, June 19, 2007

China's biofuel: Pig Problem

"Disturbingly, this is the second time in seven months that the Chinese leadership has had to resort to the country's strategic reserves to stave off politically dangerous increases in food prices. In December, Beijing ordered the auctioning of some of the state wheat reserves to halt the rise in crops prices and prevent panic among the public.

Chinese economic minders, however, are not amused. Worried about social instability fueled by inflation, they have been mulling over whether to steady prices by using the state strategic reserveof hundreds of thousands of live pigs kept at special farms for contingencies.

Current hikes in both grain and pork prices are blamed on the same culprit - the ethanol industry, whose explosive growth has been gobbling up a growing share of China's corn (maize) harvest traditionally preserved for food and animal feed." (Thanks Rania)

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