Tuesday, December 18, 2018
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Biofuels and food prices
Latinamerica Press
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A confidential report from the World Bank published on July 4 by British newspaper The Guardian revealed that a 75 percent-increase in food prices is due to the promotion of biofuels.

Sources from the World Bank who were quoted by The Guardian indicate that the report, written in April, was not made public in order to avoid compromising the US government, one of biofuels greatest promoters.

Biofuels, such as ethanol, are produced from crops, principally corn and sugarcane, and are intended to replace the fossil fuels, which are largely responsible for global warming.

The report contradicts US claims that the price rise in foods is due to the demand in countries like China and India, and droughts in Australia. Between 2002 and February 2008, food prices have increased by 140 percent, the World Bank said.

The report states that biofuel production distorted the food market by diverting grains originally intended for food consumption to biofuels, which prompted farmers to devote their lands to crops for biofuel production.

Brazilian President Luis Inácio Lula da Silva has defended ethanol production, saying that his country “will not accept the argument that biofuels cause food [price] inflation.” Brazil is the world’s largest exporter of biofuels, mainly from its vast plantations of sugarcane.

He attributed the crisis of food prices to worldwide speculation with investment funds lost in the US housing crisis that are now being aggressively directed at grain stocks, causing a hike in prices.

“This speculation allows a corn and soy producer to sell his three-year production without having produced anything,” said Lula.

According to a report from the International Monetary Fund, Haiti, Honduras and Nicaragua have been the most vulnerable countries in Latin America to the food crisis.

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