Soyabean prices are a’soaring
The Financial Times today carries an article about how soaring soyabean (soybean to us) prices are causing large-scale protests in Indonesia as prices rose 50 percent in the last month and a staggering 125 percent over the past year.
Soybeans are used in all types of Asian food in the form of soybean paste, fermented soybean cake, and tofu. It’s a major source of protein for people in many Asian countries and may be about the only protein source for many poor peoplein Indonesia.
What’s causing the huge price increases? Well, one reason cited is some major soybean producers’ shift to produce corn and other biofuel crops instead. As the FT notes:
World soyabean prices climbed to a record this week, partly because farmers in the US and Asia have instead been growing corn, palm oil and other crops to supply the biofuel industry. Bad harvests in Latin America and rising Chinese demand have added to the price pressure.
“It’s finally a trade-off between filling stomachs and filling diesel tanks in cars and trucks,” says Ashok Gulati, director at the International Food Policy Research Institute.
We at CEI hate to say “I told you so” but we did, in the form of several monographs beginning in 2006 that focused on the unintended consequences of ethanol mandates and massive subsidies for corn ethanol production. Find them here and here and other places too.