27 January 2011 15:47 [Source: ICIS news]
Correction: In the ICIS story headlined “Biodiesel demand not influencing high food prices - Godrej” dated 27 January 2011, please read in the second paragraph … Dorab Mistry… instead of … Dora Mistry…. A corrected story follows.
LONDON (ICIS)--Biodiesel demand for the production of vegetable oils has only a small influence on rising global food prices, an official with India-based Godrej said on Thursday.
In 2010, biodiesel demand for vegetable oils only amounted to 16.9m tonnes, whereas the food industry used 112m tonnes, said Godrej's Dorab Mistry, who was speaking at the FO Licht-sponsored Biodiesel Industry Forum in London.
According to Mistry’s projections for 2015, biodiesel would account for 26.4m tonnes of demand for the production of vegetable oils, whereas the food industry would account for 135m tonnes.
Earlier in the week, sources in the European biodiesel market had remarked that the food-versus-fuel debate was negligible and that demand from the biodiesel sector could not be blamed for soaring food costs.
Mistry said that while it could be argued that biodiesel production could influence food prices to a small extent, the main reasons behind the rise in food costs were the global economic recovery and climate change.
World food demand was growing by 4m tonnes/year as the global economy recovers, Mistry said. Strong demand, however, was met with tight supply due to weak harvests. It was the combination of these fundamentals that exert upward pressure on food prices, he said.
A participant at the conference remarked that food prices only account for 10% of the average European household income and that this was lower than levels in previous years.
While energy and metal prices had increased in value year on year, food prices had remained fairly static, keeping farmers poor, according to Mistry. Current food prices were therefore not high, but were instead simply achieving their real value, he added.
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