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by Jerome a Paris
Haha. The fun never stops...
Sugar: Prices soar as Brazil’s flexfuel cars set the paceOne more commodity used to fuel our cars' limitless needs is running out...
About half of Brazil’s sugar cane crop is used for domestic ethanol production, with flexfuel cars accounting for almost 50 per cent of domestic new car sales. They also represent a budding export industry, with the US, Sweden and Britain already selling the environment-friendly cars.So demand is skyrocketing, because of our need for energy, and oil-substitutes. An indirect sign of peak oil, if that was ever needed. And it's happening really, really quickly...
Czarnikow predicts a raw sugar trade deficit of more than 4m tonnes, the largest shortfall in six years. The ISO estimates that sugar inventories are about 35 per cent of global production, down from 50 per cent in the late 1990s.So, production is already lagging behind demand, and the market is getting very tight, making it vulnerable to external shocks like hurricanes (heh, in Australia this time). Isn't it strange that this is happening at the very moment these external shocks seem to become more frequent? It is really starting to look like we are getting to the end of a lot of things at the same time, as we switch from the most depleted to others, making the depletion of these catch up extra quickly. Of course, sugar itself cannot be "depleted", but the land used to grow it can, or can reach very real limits. The article suggests that Brazil's production is stagnating despite increased land use, due to unfavorable weather impact (in that case, droughts, but these seem to happen all too frequently, and what will it be the other years?) And, very similarly to the distorted energy markets, the sugar market is not really a market:
Sugar lobby still packs a punch despite reformPrices lower than they should be thanks to subsidies... lobbies that are very effective at keeping access to public funding or public "protection"... distorted incentives for all. Where have we seen this before? When will we learn?
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Peak Sugar! | 38 comments (38 topical, 0 editorial, 0 hidden)
Peak Sugar! | 38 comments (38 topical, 0 editorial, 0 hidden)
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