Global Renewable Fuels Alliance

Global Renewable Fuels Alliance

April 11, 2011 10:30 ET

GRFA to UN FAO: Oil Prices Are Driving Up the Cost of Food

TORONTO, CANADA--(Marketwire - April 11, 2011) - As the United Nations Food and Agriculture Organization (UNFAO) gathers in Rome for a council meeting on food security issues, the the Global Renewable Fuels Alliance (GRFA) has called on delegates to focus on the real driver behind rising food costs – the price of oil.

Last week while addressing the South American renewable fuels industry in Buenos Aires, the GRFA underscored the direct relationship between increasing oil prices and the rise in global food prices. GRFA spokesperson, Bliss Baker, presented data showing the direct link between the recent increase in crude oil prices and the UN FAO's world food price index.

"There is very clear evidence that oil prices are continuing to have a disproportionate affect on the price of our food," said Bliss Baker. The UNFAO's Deputy Director, David Hallam confirmed this same finding in early March by saying that "unexpected oil price spikes could further exacerbate an already precarious situation in food markets."

In January of this year the UN FAO's global food price index hit an all time high which provoked angry responses from several other organizations concerned with food security. World Bank managing director, Ngozi Okonjo-Iweala said, "food prices are not only rising, but they are also volatile and will continue this way into the future." The International Energy Agency called rising oil prices "dangerous" warning that high oil prices could threaten the stability of an already fragile recovering global economy.

"The World Bank and IEA are well aware of the relationship between the price of oil and food," said Mr. Baker. "We need these organizations to draw attention to this important issue so that we can begin to deal with our dangerous reliance on crude oil," added Mr. Baker.

Other factors that contribute to higher food prices were identified by a United States Department of Agriculture report released in February. The report highlighted factors like labour costs, packaging and processing to be the additional contributing factors in the price of food. However, the USDA went on to state that unpredictable energy costs are responsible for the recent spikes in food prices. The USDA estimated that 33% of every dollar spent on food goes to energy related factors.

"The USDA's report echoes the GRFA's position that oil prices are responsible for rising food prices," said Mr. Baker. "The world needs to take decisive action today and expand our capacity to produce reliable, clean and sustainable biofuels in order to move away from our reliance on crude oil," added Baker.

The Global Renewable Fuels Alliance is a non-profit organization dedicated to promoting biofuel friendly policies internationally. Alliance members represent over 65% of the global biofuels production from 44 countries. Through the development of new technologies and best practices, the Alliance members are committed to producing renewable fuels with the smallest possible footprint.

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