While the details of the conference were in danger of being overlooked in the hubbub surrounding the unwelcome and unexpected attendance of Zimbabwe’s President Robert Mugabe, some aid groups called for an African ‘green revolution’, while UN Secretary-General Ban Ki-moon argued that food production would have to grow by 50% by 2030 to stave off starvation. Hungry people, he warned, are angry people – a redundant observation, perhaps, given the doubling in food prices this past year has already seen riots from Buenos Aires to Manila.

There are some forces driving the current food crisis that this week’s UN food summit can’t tackle, says The Guardian, be it terrible harvests or rising demand from China and India. However, “there is one measure ministers might take that could have a real and rapid impact: call a go-slow on biofuels”. According to the International Monetary Fund, biofuels have been responsible for 20%-30% of the rise in food prices.

And the Secretary General of the UN’s Food and Agriculture Organisation, Jacques Diouf, pulled no punches in denouncing America’s policy of diverting 100 million tonnes of cereals from human consumption “to satisfy a thirst for fuel for vehicles.”

Be that as it may, biofuels “have got too much attention”, says Bronwen Maddox in The Times, and the World Bank’s Robert Zoellick “rightly called for the issue not to dominate the summit”. Indeed, “a cocktail of factors – low stocks and a weak dollar, soaring energy prices, and “a hunger for richer foods” have also contributed to the current crisis, says the BBC’s Stephanie Holmes.

Even so, “politicians in Europe and America should recognise that the subsidised growing of bio-fuels has been an error”, says The Daily Telegraph. “Yet the EU refuses to accept this is mistaken and has decided that 10% of all transport fuel should come from biofuels by 2020. The subsidies should be repealed.”

Source: Biofuels Power Global Food Crisis Talks

This from Mike Burnick:

Brazil is far and away the global leader in ethanol production technology. In fact, the country began large-scale development of ethanol as an alternative fuel source amid the oil shock of the late 1970’s and early 80’s.

Today, ethanol accounts for 50% of Brazil’s total annual automotive fuel consumption. More than 70% of new cars sold in the country are flex-fuel capable. That means they’re able to run either on gasoline, ethanol, or some combination of the two.

Currently, Brazil is the world’s second-largest ethanol producer, and largest exporter, with total output of about six billion gallons a year.

The country has its sights set on becoming the dominant global exporter of ethanol by 2020. Brazil’s global ethanol exports could total as much as 200 billion gallons a year within that time – that’s over 30-times today’s ethanol production. Talk about a growing industry!

U.S. and Europe Just Can’t Compete with Brazilian Ethanol

Brazil enjoys a big advantage over other nations – as the world’s lowest cost ethanol producer. As shown in the graph above, Brazil can distill bio-fuels from sugar cane at a significant cost advantage to other nations.

Neither U.S. corn-based ethanol, nor wheat-based ethanol from Europe, can come close to matching the Brazilians on a production cost basis.

The sugarcane plant, which flourishes in Brazil’s tropical climate, produces a “yield” of 6,000 liters of ethanol per hectare of land. That’s about twice the yield of corn-based ethanol!

In fact, Brazilian ethanol is about 40% cheaper to make than in the U.S. – and costs less than half the price of European ethanol.

When Trade Tariffs Fall, Brazilian Ethanol Will Flow

Of course Washington, in their infinite wisdom, maintains silly trade tariffs equal to 54-cents a gallon on imported ethanol. This ridiculous trade barrier benefits a relatively small number of U.S. corn farmers at the expense of millions of American drivers.

In spite of this, Brazil’s largest ethanol export market remains the United States. In fact, Brazil shipped us more than 430 million gallons of ethanol last year – up fourfold from 2004! Wholesale gasoline prices in the U.S. are leaping above US$4 a gallon, and will keep spiraling higher as crude oil goes through the roof during what’s shaping up to be a long, hot summer.

Naturally, pressure is mounting for Congress to eliminate this silly, protectionist ethanol tariff. When that happens, the floodgates will open wide for much-cheaper Brazilian ethanol to flow freely into U.S. markets.

By leveraging the strength of its vast sugarcane growing region, and building on its already well-established ethanol producing technology, Brazil is perfectly positioned to benefit.

In fact, this emerging market tiger could easily become the Saudi Arabia of ethanol within the next decade. You heard it here first!

Hopefully, American protectionist trade tariffs are lifted soon… and when they are, Brazil’s ethanol expansion would quickly follow.