August 02, 2010
World Bank Changes Tune on Biofuels Impact on Commodity Prices
Published in Hoosier Ag
The Development Prospects Group at the World Bank has concluded the effect of biofuels on food prices hasn’t been as large as originally thought, but the use of commodities by financial investors may have been partly responsible for the 2007, 2008 spike. Authors of the report say energy prices were important in the non-energy commodity price spikes seen in the past - and concluded that it’s unlikely biofuels played a big part because they don’t represent a large percentage of worldwide grain and oilseed use.
The authors of a recently released report say a stronger link between energy and non-energy commodity prices is likely to have been the dominant influence on developments in commodity - and especially food - markets. Biofuels producers and members of the Renewable Fuels Association have challenged people blaming ethanol and biodiesel production for the spike in commodity prices. RFA President Bob Dinneen says the report reaffirms the marginal role biofuels play in world commodity and food prices. Dinneen states the report should silence critics in the food processing industry, livestock industry, on Capitol Hill and anywhere else that sought to portray ethanol as the boogeyman - perhaps allowing a real conversation about America’s energy future to ensue.
