News

May 11, 2008

Market Roundup: Tarrifs And Subsidies Cause Much Gnashing Of Teeth

By Sally White

The World Bank has called on national governments not to mandate an increase biofuels production until there is greater clarity about how much biofuels are contributing to the global food price crisis. Juergen Voegele, director for the Agriculture and Rural Development department at the World Bank, cautioned against shifting blame to biofuels, but also said that the massive subsidies available to the biofuel industry were not helping the crisis.

He said the World Bank was analysing the economic, environmental and social value of biofuels. The World Bank does not expect the food price crisis to ease any time soon. As commodity markets have soared, so the amount of money invested in funds that track the two most popular commodity indexes have risen by 48 per cent so far this year, according to analysis from Sanford C. Bernstein & Co.

The total amount of investment tracking the Standard & Poor's GSCI index and the Dow...