Brazilian Lula da Silva blames speculators for soaring food prices

Brazilian president says speculators, not biofuels, to blame for soaring food prices

2008-07-12 10:31:06 -

JAKARTA, Indonesia (AP) - Biofuel production is not to blame for soaring global food costs, Brazil's president said Saturday, calling for incentives for developing countries to grow food crops as a way out of the crisis.
«Ethanol for biofuel production is not the villain that threatens food security,» Luiz Inacio Lula da Silva said in Indonesia after meeting President Susilo Bambang Yudhoyono.
Both Brazil and Indonesia are major growers of crops that are used for biofuel production.
Fuels made from sugar cane, corn and other crops have been seen as a way to combat climate change and rising oil prices. Last year, the European Union endorsed a plan calling for biofuels to make up 10 percent of the fuel for road vehicles by 2020.
But environmentalists, international groups and some countries are becoming increasingly wary of so-called «green fuels,» which they say could accelerate global warming by encouraging deforestation for plantations _ at the same time further increasing commodity prices by taking land used for food production.
Experts say prices of corn, wheat, rice, soybeans and other food products have soared over the last year due to a complex mixture of factors, including high oil prices, changing diets, expanding populations, growth in biofuel production and speculation.
Silva singled out speculation as the major cause of the current crisis and said China was also being unfairly blamed. He called for incentives for poor countries to increasing food production as a way to bring down prices. He gave no more details.

Indonesia is hoping to make biofuel production, mostly from palm oil, a centerpiece of its economic development. Foreign and local companies have invested millions of dollars in new plantations and processing plants.
Yudhoyono said the government would send a team of experts to Brazil to learn more about biofuel production.