World Bank report could undermine biofuel support

WASHINGTON (Reuters) – A leading World Bank economist’s claims that biofuels are a major cause of soaring world food prices could further undermine support for the alternative fuel worldwide and cause tensions with the White House, which fervently supports the new industry.

The draft report by the World Bank’s top agricultural economist, Don Mitchell, estimates that the growing use of food for fuel, combined with low grain stocks, market speculation and export food bans, contributed as much as 75 percent of the 140 percent rise in prices between January 2002 and February 2008.

The remainder of the increase is due to a weakening U.S. dollar, higher energy prices and related increases in fertilizer costs, he said.

Reuters