05 February 2007

Oil prices & tortillas

According to the Washington Post, there was a march in Mexico City last week to protest at the sharp increase in the price of tortillas, an important basic foodstuff for Mexicans. The price rise is due to the rise in the price of corn (up over 60 per cent since September), which in turn is due partly to the increased demand for corn to produce ethanol as an alternative energy source.

An estimated 75,000 people turned up. Tortillas form a major part of the diet for Mexico's poorest inhabitants, so they have been hit particularly hard.

This, I am sure, is only the first of many crises which the current commodity boom — and particularly the impending energy revolution — will generate over the next few years.

Via Zeal Intelligence.

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