Biofuels not at root of food inflation: Potash CEO
WINNIPEG, Manitoba (Reuters) - Government policies spurring biofuel production are not to blame for grain shortages and food inflation, said the chief executive of Potash Corp, the world's largest fertilizer company.
Bill Doyle said demand for meat and other food from Asia's growing middle class combined with a depletion of world stocks are the major factors behind rising food prices.
"I think that ethanol is the most popular whipping boy in the agricultural world at the moment," Doyle told analysts on a conference call on Thursday.
Doyle, who has talked about declining world grain stocks for years, noted 95 percent of the world's grain crop this year will be used for food.
"So to say that biofuels are the culprit clearly underestimates the demand and really shows a gross misunderstanding of the world food situation," Doyle said.
Cutting back on biofuel production would be a short-term measure for the long-term challenge of producing enough food to feed the world, he said.
Doyle said moves by governments to curb grain exports could lead to less grain production at a time when more is needed.
"Governments finally wake up to the problem, they go into a flat panic, full lather, and they make policies that are absolutely wrong-headed, and are making the situation worse," he said.
Brazil, Indonesia, Vietnam, India, Egypt and Cambodia have recently introduced export bans or tariffs on rice -- a grain that Doyle noted is not used to make biofuel -- which could exacerbate shortages in stores seen as far away as North America.
"By limiting exports of rice they try to keep the price of rice low in their home country, which doesn't give any stimulus to farmers to grow more rice.
"We have to grow more food. We have to increase yields," he said.
(Reporting by Roberta Rampton; Editing by Peter Galloway)