Biofuels could cause shortages

Food manufacturers face raw materials shortages and unsustainable price hikes if crops continue to be diverted into biofuel production, a leading European margarine and fats supplier has claimed.

Gordon Kirkwood, md of Vandermoortele's margarines and fats division, said he was concerned that regulators developing policies likely to have a huge impact on agricultural markets had not consulted the food industry.

Moves to increase the proportion of biofuel used in European road transport to 10% by 2020 were already boosting maize and rapeseed oil prices, he claimed. US plans to substitute 20% of petroleum with ethanol by 2017 were compounding the undesirable rises, he added.

Palm oil prices, meanwhile, had soared 50% in less than a year as the plants were used to produce biodiesel, he said.

Adding that Greenpeace and Friends of the Earth had repeatedly claimed that the environmental benefits of biofuels were highly questionable, he said: "It's a crazy situation where governments subsidise farmers to divert agricultural land into fuel production." Rainforests, peatlands and natural grasslands in south America and Asia are being destroyed to grow 'greener' fuels, he said.

Food producers would have to secure longer term buying arrangements to ensure the security of raw materials supplies, he added.

It was assumed that second-generation biofuels from non-food sources would ultimately solve the problem, European food trade body the CIAA has said - but the European Commission (EC) has provided no assurances about technological progress.

"The EC's assumption gives rise to concern, because nothing in the report provides assurance as to their availability between 2010 and 2020," it said.