A recent study by the World Bank, Long-Term Drivers of
Food Prices, confirms that oil prices are the biggest contributor to
rising food prices.
Using data from 1960-2012, the study applied an economic
model to five food commodities -- maize/corn, wheat, rice, soybeans and
palm oil. It examined the impact of a number of food-price
drivers including energy prices, exchange rates, interest rates, inflation,
income and a stocks-to-use ratio (a ratio of the available food stocks
compared to consumption).
The analysis showed that oil prices were significantly
more influential than the next-most influential factor, the
stocks-to-use ratio.
Petroleum is used in all aspects of the production and
distribution of food -- from fertilizer production, to powering farm
equipment, to packaging and processing food, to transporting the final
product to consumers. The report suggests that to stem rising
food prices, we must control oil prices.
You can find the full report
here.
http://econ.worldbank.org.
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