I can’t let Mr Fin’s comments go. Biofuels are an important part of the energy price issue, affecting the energy-food dynamic. According to the International Food Policy Research Institute (see here), the causes of higher food prices in order of severity are:
1. Income growth and demand
2. Biofuels (Energy prices in output decisions)
3. Underinvestment in technology
4. Trade policy & low stocks
5. Production shocks (like cold weather)
6. High input & transportation costs (energy price in input decisions)
7. Population growth
There are other studies that suggest biofuels are responsible for up to a third of the recent price rise in food.
I agree completely about Brazilian ethanol, although it comes, thanks to a ripple effect, with environmental consequences of its own.
