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Energy and agricultural commodity prices are increasingly
correlated with each other. Rising oil prices increase fertil-
izer costs and freight rates. The emerging biofuel market
strengthens these interdependencies, while a higher oil
price increases demand for biofuels. The agricultural com-
modities used nowadays for biofuels were previously used
for feed and fodder. As well demand for agricultural com-
modities as for factor inputs increases in this case.
Yields must increase by at least 43% by 2030 to meet de-
mand, assuming all other factors constant (FAO, 2003).
Fertilizer alone accounts for about 50% of historical in-
creases in production (FAO, 2003). The projected increases
required to sustain demand assume a substantial increase
in the use of fertilizers by small-scale farmers in the region.
As the cost of fertilizer is strongly correlated with oil prices,
the future prices of oil will have a great influence on the ac-
cessibility of farmers to commercial fertilizer. Current FAO
projections (2015/2030) scenario assumed an average oil
price of US$21/barrel, while the later 2030/2050 scenario
assumed an average oil price of US$53.4/barrel. At the peak
of the current food crisis, oil prices hit US$147/barrel. As
the cost, and subsequent use, of fertilizer is strongly cor-
related with price, a potentially higher oil price would lower
the use of fertilizer or further increase the food price.
Fuel price is one of the main determining factors for fisher-
ies. Rising energy prices have a strong impact on capture
as well as aquaculture (for the production and transport of
fish feed) and lead to higher costs during the processing,
transport (particularly air freight) and distribution of fish
products. Small-scale fisheries, which depend on outboard
motors and small diesel engines, have especially suffered
from the spiralling rise in fuel prices.
The relationship between food prices and
the oil price