A few years ago, the biofuel industry was busy taking heat for rising tortilla prices in Mexico and expensive corn in the U.S., among other things. Turns out, the food vs. fuel debate may have been a bit overblown. At least, that's the verdict of the Development Prospects Group at the World Bank, which just released a new report called "Placing the 2006/08 Commodity Price Boom into Perspective" (PDF). The headline conclusion: "...the effect of biofuels on food prices has not been as large as originally thought."
This is a different message than a World Bank's 2008 report, "A Note on Rising Food Prices," which said flat-out that "the most important factor was the large increase in biofuels production in the U.S. and the EU." Now, with a bit of historical distance, economists working for the World Bank say:
the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called "financialization of commodities") may have been partly responsible for the 2007/08 spike.
Does that mean Wall Street hooligans were behind the problem? Are they responsible for everything bad?

[Source: Domestic Fuel | Image: www.futureatlas.com – C.C. License 2.0]


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