Price of Oil Affects Food CostsMon, 11 Apr 2011 17:27:27 CDT
As the United Nations Food and Agriculture Organization gathers in Rome for a council meeting on food security issues, the Global Renewable Fuels Alliance has called on delegates to focus on the real driver behind rising food costs – the price of oil. Last week while addressing the South American renewable fuels industry in Buenos Aires, GRFA spokesperson Bliss Baker presented data showing the direct link between the recent increase in crude oil prices and the UN FAO’s world food price index.
Baker says there is very clear evidence that oil prices are continuing to have a disproportionate affect on the price of food. UNFAO’s Deputy Director, David Hallam, confirmed this same finding in early March by saying unexpected oil price spikes could further exacerbate an already precarious situation in food markets.
According to USDA, labor, packaging and processing costs are additional contributing factors in the price of food. However, according to USDA, unpredictable energy costs are responsible for the recent spikes in food prices. USDA estimates that 33 percent of every dollar spent on food goes to energy related factors.
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