April 22, 2008 / 12:52 PM / 12 years ago

Oil World expects states to cut back biofuel plans

A farmer harvests unripened wheat by hand in a field in the Nile Delta town of Mansoura city, 210 km (130 miles) north of Cairo in this March 23, 2008 file photo. REUTERS/Nasser Nuri

HAMBURG (Reuters) - Governments worldwide are likely to reduce their targets to increase biofuel use because of rising food prices, Hamburg-based oilseeds analysts Oil World forecast.

“The biofuel targets are too ambitious and cannot be achieved without severe repercussions on tightening food supplies and skyrocketing prices - to the disadvantage of consumers in developing countries,” it said. “A fight for acres (hectares) is underway between energy crops and food crops.”

“In our opinion, there is a relatively high possibility that the severe global food crisis and the worsening of the food supply in many of the poor developing countries will create enormous political pressures in Europe and elsewhere to revise future biofuel targets.”

Most biofuels are currently consumed in the U.S. and Europe, it said. Governments have sought to raise biofuel use to protect the environment and reduce global warming.

“The global market already struggled to expand production of oilseeds and products as well as of grains and livestock products during the past 12 months, but was unable to cope with the rapidly rising global demand for food as well as biofuels and other uses,” it said.

It added: “In our opinion, there is a relatively high possibility that the severe global food crisis and the worsening of the food supply in many of the poor developing countries will create enormous political pressure in Europe and elsewhere to revise future biofuel targets.”

Reporting by Michael Hogan; Editing by Peter Blackburn

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