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Warning: tequila prices to skyrocket as Mexican farmers turn to corn
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by Snelgrove Bottomly | June 21, 2007 at 09:37 am
1109 views | 12 Recommendations | 2 comments
I am putting this story in the "emergencies" category." No one has properly analyzed the impact of the western world's biofuel policies. In this story from the Christian Science Monitor, the reporter properly notes that "Ethanol demand has doubled corn prices, making it more profitable than agave," the plant from which tequila is made.
In my humble opinion, Sara Miller Llana missed the bigger story: what happens to the price of tequila???
"There is a lot of enthusiasm for corn across the country," says Carlos Salazar, secretary general of the National Confederation of Mexican Corn Growers. Prices are up 80 percent, from 2006 to 2007. By the end of this year, he says, 2.5 million more tons of corn will be planted.In April, Mexico's Congress passed a law for cleaner-burning ethanol to oxygenate gasoline in Mexico City, Monterrey, and Guadalajara.
But it has also pushed up prices for a Mexican food staple. Earlier this year corn tortilla prices doubled in some parts of the country, fueling protests and concerns for the 50 million poor Mexicans who depend on tortillas for the majority of their daily caloric intake.
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Most RecentMost Recommended Comments (2)
at 10:14 on June 21st, 2007
Snelgrove Bottomly, this story is really good stuff. You provide the insight necessary to fully appreaciate the severtiy of the situation. And to quote one of my co-workers, "ethanol is stupid becase that are other alternative fuel sources which wont drive up the prices of everything we hold dear especially tequila."
at 10:29 on June 21st, 2007
So should we stock up? Seriously, though, I agree: now we can expect consumer prices will rise both on corn-based products (due to greater demand) and on agave-based products (due to scarcity).