baltimoresun.com

« What those darn mortgage securities are worth | Main | Bond shop: Deflation, not inflation, is the main threat »

July 30, 2008

World Bank: Blame ethanol policy for expensive food

Who you gonna believe? The Renewable Fuels Association, which is bought and paid for by the ethanol industry?

Numerous statistical analyses have demonstrated that the price of oil - not corn prices or ethanol production - has the greatest impact on consumer food prices because is integral to virtually every phase of food production, from processing to packaging to transportation.

Or the independent economists at the World Bank?

The combination of higher energy prices and related increases in fertilizer prices and transport costs, and dollar weakness caused food prices to rise by about 35-40 percentage points from January 2002 until June 2008. These factors explain 25-30 percent of the total price increase, and most of the remaining 70-75 percent increase in food commodities prices was due to biofuels and the related consequences of low grain stocks, large land use shifts, speculative activity and export bans.


Posted by Jay Hancock at 11:35 AM | | Comments (0)
        

Post a comment

All comments must be approved by the blog author. Please do not resubmit comments if they do not immediately appear. You are not required to use your full name when posting, but you should use a real e-mail address. Comments may be republished in print, but we will not publish your e-mail address. Our full Terms of Service are available here.

Verification (needed to reduce spam):

About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
-- ADVERTISEMENT --

Most Recent Comments
Baltimore Sun coverage
Sign up for FREE business alerts
Get free Sun alerts sent to your mobile phone.*
Get free Baltimore Sun mobile alerts
Sign up for Business text alerts

Returning user? Update preferences.
Sign up for more Sun text alerts
*Standard message and data rates apply. Click here for Frequently Asked Questions.
Charm City Current
Stay connected