Brazil's President Lula rejects biofuels link to rising food prices

Yahoo News 10 Apr 08;

Brazilian President Luiz Inacio Lula da Silva on Thursday rejected any link between rising global food prices and the growth in biofuels, of which his country is the world's biggest exporter.

Speaking in the Netherlands on the first day of a state visit, Lula told reporters: "Don't tell me biofuels are causing inflation," Lula told a press conference on the first day of his state visit to the Netherlands.

Brazil is the world's second largest producer of ethanol biofuel and the sugarcane used to produce the ethanol is taking up an ever greater part of Brazil's agricultural lands.

British Prime Minister Gordon Brown on Thursday wrote to his Japanese opposite number, demanding that the forthcoming G8 summit look at whether biofuels are "responsible and sustainable" in the light of rising food prices. Some experts say the biofuel crops are squeezing out other crops grown for food, causing a hike in food prices, but Lula rejected that.

"Today there are more people who eat. The Chinese eat, the Indians eat, the Brazilians eat ... and people live longer," Lula said, arguing that the growing number of mouths to feed is causing the inflation in food prices.

"I ask the whole world to produce more" to meet the global food needs without an increase in prices, Lula told journalists after a meeting with Dutch Prime Minister Jan Peter Balkenende.

Last year Brazil reported an inflation figure of 4.47 percent, the highest since 2005. For meat consumer prices were up 22 percent in Brazil in 2007 while the prices of bread and soy bean oil were up 7.93 percent and 7.58 percent respectively.

Brazil is the world's largest exporter of ethanol biofuel and it is set to sign a bilateral agreement with the Netherlands on Friday increase cooperation on biofuels.

The Netherlands is the biggest foreign investor in Brazil, pumping in 8.1 billion dollars (5.1 billion euros) last year and buying up around 8.8 billion dollars' worth of imports, according to official Brazilian figures.