Biofuels not driving food prices - EU

The European Commission says it is wrong to blame the development of biofuels for high food prices.
It claims there is 'no simple explanation and no single cause' for the price boom. Instead it says it reflects poor harvests because of climate change, increasing demand - particularly from Indian and China - and volatile markets. It claims the fall in the value of the US dollar has contributed to the volatility of global markets.
The Commission says food prices will stabilise but not in the short term. It says that since February 2007 the price of wheat in Europe has increased by over 80 per cent, while other products are up by around a third. It says one reason the increases are so big is because prices were artificially low in the past.
The Commission says diets are changing in developing countries. It also points to drought in the southern hemisphere, but maintains that while biofuels have affected maize and oilseed markets they have had little impact on wheat and rice - the commodities that have seen the most dramatic price increases.
Despite the hype surrounding price rises, the Commission says there has been no sharp rise in the price of livestock products. Pigmeat prices have risen by 10 per cent from the doldrums of 2007 and beef is up by five to 10 per cent, largely because Brazil is out of the European market. The Commission says the dairy peak has passed and that even wheat prices will slip from their record highs, because global production will be up this year. For the future it says all prices will stabilise below where they are now, but well above the lows of the late 1990s.