Current high food prices are being caused by several complex factors, including high energy prices and poor harvests, according to experts at the Wageningen University and Research Centre in the Netherlands.
Overestimation of speculative investment in food crops may be directly causing prices to increase, states their paper, which also underlines that a downward trend in price would affect investment and result in falling prices. Although in principle there is enough food in the world, "there is a distribution problem," it adds.
Regarding biofuels, their impact on world food prices should not be overestimated, believe the authors, pointing to the limited amount of agricultural productoin reserved for biofuels - only 5% of oilseed is used for biodiesel while 4.5% is allocated to ethanol, they say. Nevertheless, they believe prices remain high as there is an increasing demand from an as-yet unprofitablebiofuel sector.
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