Monday, April 23, 2007

First Mexican Tortillas, Now German Beer

The China Post is reporting that beer pricing are on the rise in Germany due to 100% increase in the price of barley over the last year. The price of barley is on the rise for two reasons: (1) an "extremely poor" 2006 harvest, (2) government subsidies for biofuels that are making it more profitable to plant crops other than barley.

"The price of barley, which is used to make malt, an essential ingredient in brewing, has doubled in the space of a year from 200 to 400 euros per ton on the German market.

"Brewers and farmers say an extremely poor barley harvest in 2006 has exacerbated an emerging trend of converting barley fields to growing the plants used in biofuels, such as rape seed. The amount of land used for growing barley in Germany is receding by five percent a year.

"The march of biofuels is inexorable. Of the 12 million hectares farmed in Germany, two million are already being used for plants which can be turned into biofuel.


"The impact of the biofuels is not restricted to beer, with the price of bread likely to rise by 10 percent as a result of reduced grain production, the German bakers' federation has warned.


"But Jens Redemacher, the head of the cereals division of the federation of German farmers, said the brewers also had themselves to blame.

"'They have demanded lower and lower prices for barley which has caused farmers to abandon growing it because it was no longer profitable. So biofuels are not the only culprits,' he said.

"The food industry is 'just going to have to get used to having a competitor for the purchase of cereals, especially those used for biofuels,' Redemacher said."
This is not entirely unlike the Mexican tortilla situation.

HT: Fark Headline


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