The Food and Agricultural Organization of the UN is preparing to hold a global meeting focusing on grains and rice in response to a recent surge in wheat prices and rising concerns of wheat shortages as a result of drought in the Russian Federation. In anticipation for biofuels to take the blame as a component of rising food prices, the Global Renewable Fuels Alliance (GRFA) is calling for the UN to reveal the true impact that crude oil has on food prices. GRFA says that a heavy reliance on crude imports is one of the leading causes of food inflation and price spikes.
“The FAO has recognized a variety of drivers behind food price spikes, such as drought, energy prices and trade restrictions; however, the impact of crude oil prices on food inflation cuts across all national boundaries and has a disproportionate impact on food prices,” said GRFA spokesperson, Bliss Baker. “As long as we are dependent on crude oil for our primary source of energy, we will continue see food prices climb as crude oil prices climb.”
According to GRFA, this crude oil / food price connection is even more acute in developing countries where 37 of the 44 poorest countries on earth are net energy importers. The rising long-term outlook for energy prices puts true food security for many of these countries in jeopardy.
However FAO claims, “increased demand for biofuels will help revitalize the worldwide agricultural sector without putting our secure food supply in jeopardy. Next generation biofuels production hold even greater promise and will create new markets for farmers in developing countries and help bring unproductive land into production.”
Baker stressed that the global biofuels industry is very concerned about food prices and supports the World Bank’s recent analysis highlighting the crippling impact of oil prices and drought on food prices. He noted that, “There is no doubt that Biofuels are part of the solution. They reduce our reliance on crude oil and therefore limit the impact of crude oil prices on food inflation.”