[NYTr] IMF Reports Biofuels Cause of Increased Food Prices

[All the News That Doesn't Fit]

Granma Daily - Dec 17, 2007
http://www.granma.cubaweb.cu/english/news/art11.html


IMF Reports Biofuels Cause of Increased Food Prices

TEGUCIGALPA, December 16.— The current escalation in food prices is in
part the result of biofuel production in developed countries, states an
International Monetary Fund (IMF) report quoted by Notimex.

The investigation drafted by the IMF’s chief economist, Simon Johnson,
indicates that food products suffered a major inflationary shock during
the last year.

The report states that at times the benefits of biofuels are
exaggerated and that while ethanol production using corn does not
generate much net energy, it has led to an increase in the price of
corn and has other effects since European countries and the United
States have earmarked part of the land previously used to grow wheat
for planting corn.

According to the IMF, in many poor countries and other emerging
markets, food equals 30 percent of the consumer expenditures and in the
poorest countries can be 50 percent or more; therefore an increase in
food products immediately translates into greater inflation.