The Impact of Biofuels on Commodity Markets

Well-funded campaigns by reluctant oil majors, anxious food companies, sceptical environmental groups and concerned politicians have turned a generally positive view of the renewable fuels in mainstream media into one that vilifies them for stoking food prices. At some point over the past year, the message that biofuels are an effective way of tackling climate change, improving fuel security and providing better opportunities for farmers, has been lost.

Despite rocketing crude oil prices (that biofuels are helping to cap), surging food demand in developing countries, a massive influx of investment in commodities and crop losses in key producing areas, these headline-grabbing reports focus their ire on these novel fuels. Biofuels have undeniably contributed to changing trade flows and higher prices for some agricultural commodities. How much this has fed through to food prices is an increasingly contentious point of debate.

A report by the OECD/FAO has cited biofuels as a major factor that will mean food prices will be high for the next 10 years. Despite falling back, says the report, prices will not return to pre-crisis levels. The USDA has been one organisation to counter the criticism, noting that farm prices contribute no more than 20% to the overall price of food. Furthermore, USDA chief economist Joe Glauber has said a 50% rise in corn prices would raise the CPI less than one percentage point above the normal rate of food price inflation. But with Jean Ziegler, UN special reporter for the right to food, describing biofuels as "a crime against humanity", it is clearly time for more reasoned debate.

The Impact of Biofuels on Commodity Markets Conference will bring together leading officials across the whole spectrum of those affected by rising biofuel production.Two senior representatives from the European Commission, which has been under pressure to drop or modify its ambitious long-term targets for biofuel use, will look at the efforts being made to make Europe's biofuels strategy sustainable from farmer and biofuel producer right through to food company and their customers.

Other speakers will forecast how ethanol and biodiesel production will develop in coming years. Particularly given that record and volatile agricultural commodity prices are squeezing margins to the point that biofuel production facilities in the US, Europe and Asia are being mothballed. Even so, many food, feed and livestock producers are suffering. But to what degree can they mitigate higher input costs and pass them onto consumers? Despite complaining of rising raw material costs, Nestlé, the world's largest food company, raised prices and reported a 6% climb in sales during the first quarter.

And while the criticism of biofuels lingers, few have acknowledged that following record or multi-year high prices in corn, wheat, soyabeans, palm oil and rapeseed, many markets have already cooled considerably. Chicago wheat prices, for example, dropped by roughly 50% between March and the end of May.

Speakers at The Impact of Biofuels on Commodity Markets will look at the prospects for price corrections in the major grain, sugar and oilseed markets; how technology will develop more feedstocks, both from food and from non-food crops; and the feasibility of cellulosic biofuel production. No matter how your company or organisation is affected by the continuing boom in biofuels production, you are sure to benefit from the wide variety of expert speakers.

TheBioenergySite News Desk

Sign up for our
regular news updates

Latest Bioenergy Industry News

•   Cooperation Agreements for Brazil and Canada
•   NTR in Algae Joint Venture
•   Symposium on Future of Biodiesel
•   Consumers Energy Wind Farm Plan
•   Commissioner at International Conference on Biofuels
•   Daewoo Logistics Biofuel Project for Madagascar
•   Biodiesel from Urban Waste
•   Wind Farm Plan for Brazil
•   Egypt Wants Brazilian know-how in Biofuels
•   Inland Empire Oilseeds Starts Biodiesel Production