Biofuel Impact on Food Crops in Thailand
June 26, 2009| |
A recent study by the Bank of Thailand found significant correlation between ethanol demand and increases in feedstock prices, particularly for tapioca prices. However, despite higher feedstock prices, increased biofuel demand should have only a marginal impact on food prices. Currently the commodity most susceptible to increased biofuel demand is palm-based cooking oil. However, the price of palm cooking oil is currently regulated by the Thai Government. Ethanol is produced using sugar and tapioca as feedstock.
Longer term increases in the quantity of tapioca produced is not expected to come at the expense of food crops. All other things being equal, ethanol production will likely remain viable despite anticipated higher feedstock prices, which have been driven by market demand and government intervention programs. Price increases for tapioca should drive yield improvements and acreage expansion in the long run. Domestic demand for feed corn, often grown in the same areas as tapioca, will likely be met by low-cost imported corn from neighboring countries. Increased demand for biodiesel should drive acreage expansion for oil palm through orchard replacement.
More information available at Biosafety and Biotechnology Information Center in Thailand at http://safetybio.agri.kps.ku.ac.th/images/stories/pdf/thai.biofuel.food2009.pdf
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