Bio-fuel demand powering long-term food inflation

A United Nations FAO and OECD report predicts that demand for bio-fuels will push up crop prices steeply, and hence food prices - which in turn will boost agricultural land prices. ‘Food prices will rise by between 20 and 50 percent over the next decade from average levels over the last ten years, supported by the growth of the bio-fuel industry and increased food demand in emerging countries, a study warned yesterday. The report by the United Nations Food and Agriculture Organization (FAO) and the Organization for Economic Cooperation and Devlopment (OECD) added that long-term prices would be up to 30% higher than previously estimated.’

Financial Times, Javier Blas, 05/07/07