Thursday, July 12,

Biofuels Cause Skyrocketing Pasta Costs in Italy

The ANNOTICO Report

BioFuels is a Stupid Idea.!!!!!!!    American car makers have furiously fought Higher Fuel Efficiency (and Lower Pollution standards) for decades, a MUCH Better IDEA to conserve Oil!!!!! 

You have Food Costs as one of the Low Income Families Budget Busters, and Famines, and People Starving worldwide, and you turn Food into Fuel??     

Thanks to Pat Gabriel

SPAGHETTI SHOCK IN ITALY

Biofuels Boom Results in Pricey Pasta

Italian pasta makers say bad harvests and competition from biofuel manufacturers have led to a durum disaster. Consumers will be paying for it by summer's end.

Reuters

July 11, 2007

Mamma mia! The price of a plate of pasta is expected to rise 20 percent this summer as a bad wheat harvest and increasing competition from biofuel manufacturers send the price of delicate, delicious durum wheat skyrocketing.

Italian consumers, accustomed to paying 70 euro cents ($1) for a pack of the good stuff -- half the cost of a cup of coffee -- will be the first to feel the pinch, but the Italian Pasta Manufacturer's Association will be passing the costs on to export customers as well. "Pasta producers have tried, with growing difficulty that has now become no longer sustainable, to absorb the high cost differentials," the Association announced last week. "But this situation cannot go on any longer in the face of the dynamics of the durum wheat market."

Italy's famous macaroni makers are the latest to find themselves at the wrong end of competition from the booming biofuel industry, which converts corn, sugar, wheat and other crops to fuel and energy. As biofuels catch on, governments are increasing subsidies. Farmers are finding themselves in an unfamiliar position: a seller's market. Courted by food manufacturers and energy firms alike, they're raising prices and shifting production to crops that can be used to make ethanol for cars, heat homes or generate electricity.

Cooler heads have pointed out that the biofuel boom may not be singlehandedly responsible for this year's shortage. Mother Nature herself may shoulder some of the responsibility. Unusually hot weather in grain producing countries like the US, Canada, Australia, Syria and Morocco has resulted in unusually low crop yields. Europe, on the other hand, has been drenched by rain, damaging delicate durum wheat crops. The weather's one-two punch means the 2007 harvest is going to be at least 3 million tons short.

But hungry pasta fans keep eating, bringing the world's stocks to their lowest levels in a decade. European producers are in particularly dire straits. Global prices for durum wheat have spiked, to more than $350 a ton. Wheat producers in France, where wheat stocks are at their lowest levels in 20 years, said that wheat prices there have gone up 40 percent in a matter of weeks. Since pasta has only two ingredients -- durum wheat and water -- pasta producers are in a bind. "Pasta prices are going up because the price of the raw material is increasing," Cristiano Laurenza, food law policy expert at the Italian Pasta Manufacturers' Association, told SPIEGEL ONLINE.

The pasta crisis is the latest in what may soon be a regular rise in global prices. In January, Mexican consumers were hit with a tortilla crisis, as grain prices doubled and tripled the cost of tortillas and caused riots in some places. Beer prices in Germany ticked upwards in May partially due to the increased production of biofuels.

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