Biofuels hiking global food prices - OECD, UN

04 July 2007 12:32  [Source: ICIS news]

LONDON (ICIS news)--A new report by the OECD and the UN's Food and Agriculture Organisation (FAO) has cited increased demand for biofuels as a key factor in rising global crop and livestock prices, the FAO said on Wednesday.

 

The growing use of cereals, sugar, oilseed and vegetable oils to produce fuel was underpinning crop prices and - indirectly through animal feed costs - the prices for livestock products, said the OECD-FAO Agricultural Outlook 2007-2016.

 

Higher commodity prices are a particular concern for net food importing countries as well as the urban poor, said the report.

 

While high feedstock prices caused by increased biofuel production benefited feedstock producers, it would mean extra costs and lower incomes for farmers who use the feedstock for animal feed.

 

In the US, annual maize-based ethanol output is expected to double between 2006 and 2016, while in the EU the amount of oilseeds used for biofuels is set to grow to 21m tonnes from 10m tonnes in the same period, the report said.

 

In Brazil, the world’s largest biofuels producer, annual ethanol production is projected to reach 44bn litres by 2016 from 21bn today, and in China, will increase 3.8bn litres from 2bn litres today.

 

The European Commission will bring together some of the most influential figures in global biofuels later this week to discuss the benefits and challenges of the high-growth alternative fuels sector.

 

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Author: Mark Watts
+44 20 8652 3214

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