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Aff – Oil PricesOffenseFood Prices Impacthigher oil prices increase food prices –increase distribution costs and demand for biofuels that put pressure on food supplyAllen 12 [Katie Allen, The Guradian: Economics Blog: Oil prices: 10 reasons to be fearful, http://www.guardian.co.uk/business/economics-blog/2012/mar/02/oil-prices-10-reasons-to-be-fearful // Accessed: July 6th 2012 // BP] 1. Higher petrol prices: Given the typical relationship between petrol prices on the forecourt and the price of crude oil, if the latter did move up to $150 a barrel, we could expect the price of petrol a litre to move up from around £1.34 to over £1.50 – a new record high by a significant margin. That is bad news for both inflation and consumer confidence. 2. Higher household energy bills: Gas and electricity prices typically take a steer from the price of oil. If oil rises sharply, it is more likely than not that household energy bills will rise at some point. Indeed, the price of gas traded in the wholesale market has risen by at least 10% over the period since oil has been surging. Timing is key. In continental Europe, particularly France, when oil prices move, household energy bills typically adjust very promptly. By contrast, in the UK, price hikes are unusual at the end of winter. This is because utility providers will get lots of bad press, but not much increase in profit margins as households switch off their central heating for summer. If, however, elevated oil prices persist until the autumn, then utility bill hikes at that point will become more likely. 3. Higher food prices: A fair proportion of the cost of food is distribution, fuel for farm vehicles and petro-chemicals. Furthermore, the emergence of bio-fuels means that higher oil prices has tended to exert upward pressure on agricultural commodity prices, since these can be used as a substitute for oil. Higher agricultural prices typically mean higher food prices in household shopping baskets. 4. Risk of persistently high inflation: All in all, we calculate that in a scenario where oil prices surge to $150 per barrel, CPI inflation in the UK would be at least 1% higher at the end of this year than we have assumed in our base case. That would mean inflation ends the year a little above 3% rather than the near 2% that we and most other forecasters assume. 5. The value of savings is eroded: If inflation out-paces interest rates, then it means the 'real' value of savings will fall. For example, with interest rates around 0.5% but inflation running at 4%, the real return on savings is falling. Increased demand for biofuels raises worldwide food prices –sends millions into poverty and creates political instabilityRosenthal 11 [Elisabeth Rosenthal, The New York Times: Environment: Rush to Use Crops as Fuel Raises Food Prices and Hunger Fears, http://www.nytimes.com/2011/04/07/science/earth/07cassava.html // Accessed: July 6th 2012 // BP] The starchy cassava root has long been an important ingredient in everything from tapioca pudding and ice cream to paper and animal feed. Thailand's cassava goes mainly to China, which has sought new energy sources to power growth. But last year, 98 percent of cassava chips exported from Thailand, the world’s largest cassava exporter, went to just one place and almost all for one purpose: to China to make biofuel. Driven by new demand, Thai exports of cassava chips have increased nearly fourfold since 2008, and the price of cassava has roughly doubled. Each year, an ever larger portion of the world’s crops — cassava and corn, sugar and palm oil — is being diverted for biofuels as developed countries pass laws mandating greater use of nonfossil fuels and as emerging powerhouses like China seek new sources of energy to keep their cars and industries running. Cassava is a relatively new entrant in the biofuel stream. But with food prices rising sharply in recent months, many experts are calling on countries to scale back their headlong rush into green fuel development, arguing that the combination of ambitious biofuel targets and mediocre harvests of some crucial crops is contributing to high prices, hunger and political instability. This year, the United Nations Food and Agriculture Organization reported that its index of food prices was the highest in its more than 20 years of existence. Prices rose 15 percent from October to January alone, potentially “throwing an additional 44 million people in low- and middle-income countries into poverty,” the World Bank said. Soaring food prices have caused riots or contributed to political turmoil in a host of poor countries in recent months, including Algeria, Egypt and Bangladesh, where palm oil, a common biofuel ingredient, provides crucial nutrition to a desperately poor populace. During the second half of 2010, the price of corn rose steeply — 73 percent in the United States — an increase that the United Nations World Food Program attributed in part to the greater use of American corn for bioethanol. “The fact that cassava is being used for biofuel in China, rapeseed is being used in Europe, and sugar cane elsewhere is definitely creating a shift in demand curves,” said Timothy D. Searchinger, a research scholar at Princeton University who studies the topic. “Biofuels are contributing to higher prices and tighter markets.” In the United States, Congress has mandated that biofuel use must reach 36 billion gallons annually by 2022. The European Union stipulates that 10 percent of transportation fuel must come from renewable sources like biofuel or wind power by 2020. Countries like China, India, Indonesia and Thailand have adopted biofuel targets as well. To be sure, many factors help drive up the price of food, including bad weather that ruins crop yields and high oil prices that make transportation costly. Last year, for example, unusually severe weather destroyed wheat harvests in Russia, Australia and China, and an infestation of the mealy bug reduced Thailand’s cassava output. Olivier Dubois, a bioenergy expert at the Food and Agriculture Organization in Rome, said it was hard to quantify the extent to which the diversions for biofuels had driven up food prices. “The problem is complex, so it is hard to come up with sweeping statements like biofuels are good or bad,” he said. “But what is certain is that biofuels are playing a role. Is it 20 or 30 or 40 percent? That depends on your modeling.” Exts – Increases PricesHigher oil prices increases demand for biofuels –raises biofuel prices due to inflation and competitionRosenthal 11 [Elisabeth Rosenthal, The New York Times: Environment: Rush to Use Crops as Fuel Raises Food Prices and Hunger Fears, http://www.nytimes.com/2011/04/07/science/earth/07cassava.html // Accessed: July 6th 2012 // BP] While no one is suggesting that countries abandon biofuels, Mr. Dubois and other food experts suggest that they should revise their policies so that rigid fuel mandates can be suspended when food stocks get low or prices become too high. “The policy really has to be food first,” said Hans Timmer, director of the Development Prospects Group of the World Bank. “The problems occur when you set targets for biofuels irrespective of the prices of other commodities.” Mr. Timmer said that the recent rise in oil prices was likely to increase the demand for biofuels. It can be tricky predicting how new demand from the biofuel sector will affect the supply and price of food. Sometimes, as with corn or cassava, direct competition between purchasers drives up the prices of biofuel ingredients. In other instances, shortages and price inflation occur because farmers who formerly grew crops like vegetables for consumption plant different crops that can be used for fuel. Directory: files files -> Answer True False 2 points Question 2 files -> Integer programming and game theory files -> 4 Integer Programming files -> Bpa vehicle Window Repair Scenario #1 task: Procure vehicle window relacement. Objective files -> Pop Warner History files -> North Carolina Inclusion Initiative Mapping Where Children with ieps are Being Served Purpose files -> Fall 2013 Spring 2014 Program Data: Standard 1 Exhibit 4d files -> Hanban – asia society confucius classrooms network 2010 request for proposal files -> Northern England’s set-jetting locations Download 0.73 Mb. 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