Economic Recovery May Rekindle Food/Fuel Debate

Now, initiatives to expand the production and use of renewable fuels in the name of national security, domestic job growth or to combat climate change may further fan the controversy, according to several food and agriculture company executives and industry analysts speaking at the Reuters Food and Agriculture Summit in Chicago and elsewhere.

“At the moment, the food-versus-fuel debate has been put on the back burner given what we have seen in the commodities markets,” said Doug Whitehead, a soft commodity analyst at Australia & New Zealand Banking Group Ltd.
“But it (biofuel) is still a very significant demand source for the feed grains and … it is likely to increase with the US government looking to increase their ethanol blending mandates,” he said, referring to recent calls to raise the percentage of ethanol allowed in US gasoline blends.

Food and energy prices have retreated since last summer amid wider global economic woes, but with a large biofuels industry now in place and poised to expand once economic conditions allow, competition for the limited supply of food crops will heat up again.

With next-generation biofuels made from non-food sources including grasses and agricultural waste still years away from widespread commercialization, food crop based fuels will be the primary source of bioenergy for now.

Planet Ark