Bio-fuel versus Food
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New York Times reports:
… with food prices rising sharply in recent months, many experts are calling on countries to scale back their headlong rush into green fuel development, arguing that the combination of ambitious biofuel targets and mediocre harvests of some crucial crops is contributing to high prices, hunger and political instability.
This year, the United Nations Food and Agriculture Organization reported that its index of food prices was the highest in its more than 20 years of existence. Prices rose 15 percent from October to January alone, potentially “throwing an additional 44 million people in low- and middle-income countries into poverty,” the World Bank said.
Soaring food prices have caused riots or contributed to political turmoil in a host of poor countries in recent months, including Algeria, Egypt and Bangladesh, where palm oil, a common biofuel ingredient, provides crucial nutrition to a desperately poor populace. During the second half of 2010, the price of corn rose steeply — 73 percent in the United States — an increase that the United Nations World Food Program attributed in part to the greater use of American corn for bioethanol.
Food and Agricultural Organization – FAO, click here
World Food Index reports: The FAO Food Price Index (FFPI) averaged 230 points in March 2011, down 2.9 percent from its peak in February, but still 37 percent above March last year. International prices of oils and sugar contracted the most, followed by cereals. By contrast, dairy and meat prices were up.
»The FAO Cereal Price Index averaged 252 points, down 2.6 percent from February, but still 60% higher than in March 2010. The past month was extremely volatile for grains, with international quotations first plunging sharply, driven largely by recent events in Japan and North Africa, before regaining most of their losses towards the end of the month, as markets reacted to a continuing tight world supply and demand condition. Rice prices also fell amid large availability in exporting countries and sluggish import demand.
» The FAO Oils/Fats Price Index fell 7 percent, to 260, interrupting nine months of consecutive rise. Last month’s slide in prices reflects primarily a recovery in global supply prospects for palm oil.
» The FAO Sugar Price Index averaged 372 points, down as much as 10 percent from the highs of January and February. The recent decline in international sugar prices was partly prompted by prospects of increased market availability, notably from India.
» The FAO Dairy Price Index averaged 234 points, up 1.9 percent from February and 37 percent above its level in March 2010. Firm import demand together with lower than expected production in Southern hemisphere supplying countries, where the milking season is coming to a close, continue to underpin world prices.
» The FAO Meat Price Index was little changed at 169 points in March. The upward trend in meat prices since 2010 has flattened in the past few months, reflecting trade disruptions in several key markets, particularly North Africa and Japan.