Once hailed as something that could help reverse global warming, biofuels are now being blamed for much of the high cost of food and the resulting strong performance of agriculture exchange traded funds (ETFs).
World Bank President Robert Zoellick says biofuels are a "significant contributor" to the prices. That, couples with droughts, financial market speculators and increased demand have created a perfect storm, according to a report on NPR’s Morning Edition.
A 4.4-lb. bag of rice in Bangladesh eats up half the daily income of a poor family, Zoellick said. In Haiti, where most people live on less than $2 a day, riots protesting the rising cost of living there are threatening the stability of the country, reports Jonathan M. Katz for the Associated Press.
Staples aren’t likely to get cheaper anytime soon, either. He said that since Europe and the United States have stepped up their biofuel production, it’s going to keep prices high for the next couple of years.