ECONOMICS BLOG (22/05/2017)
Bitter Sweet Pill- High oil Prices means sugar could be used as a fuel source.
The Caribbean sugar industry is suddenly looking sweet again after years of decline. That’s because it is a source of ethanol, the alternative fuel that some see as an answer to rocketing oil prices.
Ethanol, a cleaner burning alternative fuel that can be made from corn or sugarcane, is also drawing renewed government interest and is a key topic for leaders from Central America, Mexico, Columbia and the Dominican Republic. Markets for ethanol are growing due to insatiable demand for fuel and increasing demand for alternative energy sources. However, Caribbean sugar is particularly attractive because of regions preferential trade access to the US Market.
In the Dominican province of Monte Plata, Belgium based Alco group is planning to build an ethanol plant and the Dominican sugar co-operative says it plans to convert one of the sugar mill into an ethanol distillery. In Jamaica, Aracato company with headquarter in Brazil and one of the world’s leading ethanol producers is planning to buy government owned sugar corporation of Jamaica. Coming next ten to fifteen years, ethanol will be the king of fuels as global oil market has seen no major investment in exploration of oil fields and the current oil fields are already peaked.
Suddenly there is a renewed interest in sugar production across Latin America & Caribbean islands as they demand for bio-fuel ethanol soars giving high income to farmers. On the contrary corn and sugarcane meant for domestic food consumption is undergoing decline which raises the concern for vast majority of population deprived from food….. Which brings to the conclusion that there are finite resources and infinite wants thus leading to Opportunity cost.
