FAO: influence biofuels on food prices temporary

Today the Committee on Commodity Problems, an intergovernmental Committee of the UN Food and Agriculture Organization, opened a three-day meeting to review impact of oil prices and biofuels on commodity (food) prices. Although prices recently increased, FAO still thinks the long-term trend in food prices is still downward.

FAO says appropriate trade policy reform can lead to poverty reduction. But recently many agricultural commodity prices have increased. This is mainly the result of market fundamentals, but FAO warns that a number of new factors affecting commodity prices have become increasingly apparent. Among these are the impact of the rapid economic growth of China and India and the effect of crude oil prices on those agricultural products that can be used to produce biofuels. However, FAO warned in a recent report that trade policy reform is not a panacea, and the gains from freer trade will not be evenly distributed either between developing countries or within individual countries.

GP Newsdesk