Impact of alternative Crude Oil Prices on the UK liquid Biofuel and Agricultural Markets FAPRI Report 2012
Myles Patton1, In Seck Kim1, Lichun Zhang1 John Davis1 Julian Binfield 2 and Patrick Westhoff2
1: Agri-Food and Biosciences Institute 2: University of Missouri
The EU biofuel sector has expanded rapidly in recent years, largely in response to policy initiatives. The development of the biofuel sector has important implications for the agricultural sector due to the demand for feedstocks, but also potentially from the transmission of price volatility from energy markets to agricultural markets. Most observers agree that an increase in oil prices contributed (to varying degrees) to the surge in agricultural commodity prices during the 2007 to 2008 “food crisis” due to the role of biofuels. However, this influence was downplayed by the European Commission due to the limited size of the biofuel sector, at least in the EU, during this period (European Commission, 2008). This study uses an EU partial equilibrium modelling system to examine the linkages between the energy, biofuel and agricultural sectors.