Study Says Biofuels Not Main Reason for Higher Food Prices
In a report to be released Tuesday, London-based New Finance Energy says increased biofuels production is not a primary culprit behind rising food prices.
The study looks at food price increases from 2004 to 2008 and factors such as input costs, dollar depreciation, supply and demand, and speculative activity. It finds that growing emphasis on biofuels production during that period contributed to higher food prices, but was not the main driver.
“Increases in input costs — oil prices in particular — and the depreciation of the dollar have played a much larger role, as has population growth,” said New Finance Energy Chairman and CEO Michael Liebreich.
The study also points to lower crop yields, changes in consumption habits and the soaring volume of commercial and speculative commodity trading.
“We conclude that where biofuels have had a significant impact this is more due to overly rapid application of support schemes and protectionism, than to the impact of production on land use itself,” Liebreich said.
