News

October 13, 2008

United Nations Complains That Biofuels Push Up Food Prices Rather Than Cutting Greenhouse Gases

By Sally White

Financial market mayhem spread into alternative energy last week. Uncertainty added to fundamental bearish trends to produce a rout as markets were hit by a wide range of negative factors, from growing anti-biofuel sentiment to lessening of pressures for alternatives as crude price oil plunged on fears of world recession. Oil traded down US$14 at one stage, at around US$75 a barrel, a level half that of July’s US$147 peak.

The Reuters-CRB Index closed at 392.8 on Friday, down 23.87 on the day and 50.03 on a year ago. The DJ-AIG Commodity Index was down 9.4 per cent on Friday and the level on a year ago reached a low of 19.65 per cent.

Pressure for the role of biofuels to be reconsidered is building, following reports from the United Nations that promotion of biofuels had done more harm in pushing up food prices than good in reducing greenhouse gases. If demand for biofuel agriculture feedstock rose by...