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Fuel plan won't hit food supply: Expert

By Sun Xiaohua (China Daily)
Updated: 2007-07-07 09:49

Despite its ambitious plan to produce bio-energyfrom crops, the government will not allowfoodshortages to occur, nor will there be major fluctuations in the prices of agricultural products, an expert on energy research said on Friday.

"The government gives top priority to food security," Zhou Fengqi, former director-general of the energy research institute under the National Development and Reform Committee, the top economic policymaking agency, said.

"Compared with the world's leading bio-fuel producers, like the United States, China's efforts will be small-scale, and so too will be the demand for raw materials."

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Last year, China used 2.7 million tons of corn - less than 2 percent of the total yield - to produce 850,000 tons of fuel ethanol. In comparison, the US used 55 million tons of corn.

Zhou was speaking in response to a report published on Wednesday by the Organization for Economic Cooperation and Development (OECD) and the United Nations' Food and Agriculture Organization (FAO).

Agricultural Outlook 2007-16 said increased demand for bio-fuel was causing fundamental changes to agricultural markets that could drive up world prices for farm products.

The report estimated China's ethanol output will rise to 3.8 billion liters a year by 2016, up 2 billion liters a year on current levels.

"The estimated doubling of production is possible, given the country's long and medium-term plans for renewable energy development," Zhou said.

Under the plan, the country will increase its ethanol production from 1 million tons now to 2 million tons by 2010, and by 10 million tons (equivalent to 13 billion liters) by 2020, higher than the OOCE-FAO's estimate. "But staple crops such as corn will not be the main raw materials," Zhou said.

(China Daily 07/07/2007 page2)