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Biofuel rush driving up global food prices

The starchy cassava root has long been an important ingredient in everything from tapioca pudding and ice cream to paper and animal feed.

world Updated: Apr 07, 2011 23:25 IST

The starchy cassava root has long been an important ingredient in everything from tapioca pudding and ice cream to paper and animal feed.

But last year, 98% of cassava chips exported from Thailand, the world's largest cassava exporter, went to just one place and almost all for one purpose: to China to make biofuel.

Each year, an ever larger portion of the world's crops - cassava and corn, sugar and palm oil - is being diverted for biofuels as developed countries pass laws mandating greater use of nonfossil fuels and as emerging powerhouses like China seek new sources of energy to keep their cars and industries running. Cassava is a relatively new entrant in the biofuel stream.

But 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% 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.

To be sure, many factors help drive up the price of food, including bad weather that ruins crop yields and high oil prices that make transportation costly. Last year, for example, unusually severe weather destroyed wheat harvests in Russia, Australia and China, and an infestation of the mealy bug reduced Thaila nd's cassava output.

Olivier Dubois, a bioenergy expert said it was hard to quantify the extent to which the diversions for biofuels had driven up food prices.

While no one is suggesting that countries abandon biofuels, Dubois and other food experts suggest that they should revise their policies so that rigid fuel mandates can be suspended when food stocks get low or prices become too high.