Uncommon Sense

when a chemical engineer meets up with a metallurgist, they tell a story.. of finance and economics!

Friday, September 28, 2007

The Unexpected Dilemma

With the oil prices shooting up in the world market, the least thing one would expect to happen is the food prices to follow them.

The urgent and frantic need to search and develop an alternative environment-friendly bio-fuel has started having its impact on the food production. All the grains and other bio-fuel feedstocks are being excessively used for the production of ethanol and bio-diesel leading to a tightening of supply in the food market. The impact of this raise in food prices already made food-importing countries like china ban the diversion of grains meant for food production to bio-fuels. With growing inflation concerns around the world, countries like India and China are in big dilemma now of having to chose between Food and Fuel.

More the increase in crude oil prices more is the demand for bio-fuels; more are the food prices.

Well, to gain something, you lose something; but does it always have to be like that?

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