Biofuels play marginal role in cereal price increases

The recent surge in cereal prices across the EU, pushing up the price of many food items such as bread, milk and meat, has nothing to do with a bigger production of biofuels, European Agriculture Commissioner Mariann Fisher Boel wrote on her website blog.

"As far as grain prices are concerned, I am keen to refute the idea that some people are putting about that it is largely the recent interest in biofuels that is driving up prices. This is not the case - they play a marginal role at most in the EU context. More significant by far have been low harvests in many regions of the world, bad weather in Europe and growing demand from east Asia," the Commissioner wrote.

All EU member states have been experiencing a rapid increase in the cost of cereals, one of the main ingredients for the production of essential food items. Wheat and grain have reached record prices. Malta is also feeling the pinch with the recent rise in the price and government subsidy of Maltese bread.

But, although concerned, Ms Fisher Boel warned that producers should not take advantage of the situation to make extra profits.

She said that the EU cannot lose sight of the effect on consumers as this is hurting them in their pockets.

"Here, I will say only this: The increases in supermarket milk prices in some member states are definitely not warranted by the overall market supply situation in the EU. And, as we all know, the contribution of the raw material to the final price of foods like bread is relatively small, so I hope that the supermarkets and discounters will act responsibly," she wrote.

Last Monday the government announced a 30 per cent rise in the subsidy given to bakers on wheat and an increase of one cent to the price of a Maltese loaf. The government said that the price rise was in line with an increase in the cost of cereals on the international market.