Good article from the Economist on the impact of compulsory biofuel regulations on food prices.
Biofuel regulations are an undeniable “structural shock” which will lead to “structurally higher” food prices. What do I mean? The price of food relative to other things is likely to stay higher than it would have in the absence of biofuel regulations.
Now, I don’t think these regulations are the main driver of the recent price volatility – that would be droughts and economic conditions. But we can expect the relative price of food products to stay above historical averages.
How far above is a different, and very difficult, question 😉