By Sybille de La Hamaide
PARIS (Reuters) - The recent price rally in farm commodities such as grains, oilseeds and sugar beet can be attributed partly to higher biofuel demand but their share of the blame has been exaggerated, a top official of the Organisation for Economic Cooperation and Development (OECD) said.
Loek Boonekamp, a division head in the Agro-food Trade and Markets Division at the Paris-based OECD, said the surge in farm product prices -- with cereals more than doubling last year -- would have happened even without the rise in biofuel production.
"Closing your eyes and blaming the current high prices to biofuels is just too simplistic," he told the Reuters Global Agriculture and Biofuel Summit.
Boonekamp said a sharp drop in supply mainly due to adverse weather conditions in top producing countries such as Australia, tight stocks worldwide and higher demand for food in developing countries were playing the biggest role in the rally.
"We think that there are enough elements in current commodity markets that resulted in very high prices for cereals and oilseeds and even they would have happened without this hike in biofuel production," he said.
He stressed that the supply shortfall in the main grain producing countries -- the United States, Canada, Australia and the European Union -- had been of 60 million tons, four times as large as the increase in demand (for biofuels).
Biofuels have become a major issue on global commodities markets over the last years as they are increasingly put forward as politically, environmentally and economically friendly alternatives to fossil fuels.
HIGH PRICES IN NEXT DECADE Continued...
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