
Biofuels have very little to do with it at the moment. They don't take a significant proportion of food crop production.
One issue is that harvests (particularly rice) in some parts of the world have declined due to lack of investment and ubsequent use of lower yield farming techniques.
Another mayor factor has been severe impacts on harvests from weather related events e.g. reduced grain harvests in Australia due to drought.
This has mean any slack in the system has disappeared.
But while prices have gone up there are not serious shortages as such: we don't have 10's/100's of millions starving as yet due to food being completely unavailable. It exists, it's just more expensive.
The real cost driver is commodity speculation. Food, like oil and metals before it have drawn increasing levels of investment as other parts of the financial market have become poorer investments.
So we have a situation where actual supply and demand has become divorced from the value.
Oil is seriously over-valued compared to where it would be without speculation. Food products are much the same.
Obviously this is bad news for end users.
The only people likely to be unaffected are the truly poor - they don't tend to use much in the oil, and also tend to be subsistence farmers.
It's those higher up the chain who'll suffer.
This includes those in the 3rd world who used to do slightly more than subsistence level farming but were wiped out by the competition from free food aid. Food aid might make people feel good about themselves, but it destroys any local market & ultimately makes the problems worse in the future!
The only positive thing I can see is that commodity bubbles always burst, and prices will come down. I just hope it doesn't take too much of my money away when it finally happens.
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On another note, now that everyone seems to have decided that biofuels are a bad idea, is the 2.5% content target going to be withdrawn?