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Although the US was spared from riots, the rising prices were hard felt. According to the Department of Agriculture, grocery prices were rising at alarming rates not seen since 1900.The country’s biggest crops like corn, wheat and soybeans were at record prices.
The causes behind the high prices are not far to seek. Overseas, an expanding middle class is causing high demand. In China and India people with large incomes are buying not only more food but more expensive food.
Another reason is that the total quantity of corn crops used for ethanol production in the US is increasing. The extra demand for ethanol biofuels is the main cause. This creates less corn for food production, resulting in higher corn prices for corn and corn products.
The large jump in corn prices due to demand for ethanol biofuels has come sooner than expected. According to the US Department of Agriculture, the use of corn for the production of ethanol is rising sharply. This is affecting the cost of food. Mexico is a case in point, as it gets much of its corn from the US. The price of corn tortillas doubled, resulting in protest marches. The US is also affected and this hike will be passed on to consumers.
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