Food prices have risen sharply in recent months driven by increased demand and global warming has played a significant role in another driver of rising prices: the shift in agricultural production from food to biofuels.

Trying to solve this problem Brazil government is boosting its output of ethanol made from sugar cane without hindering efforts to increase food production. Brazil is the world’s largest sugar producer, and it is expected to use the majority of the cane it harvests this season to make ethanol.
Most of the studies show that there are additional efficiencies to produce biofuel from sugar and also there are more benefits in terms of greenhouse gas emissions.

On the other hand, U.S. ethanol is made from corn, which, could be exported to feed the hungry, and benefited from tariffs that block Brazilian ethanol, which is produced much more efficiently from sugar cane.

There is a second stage of biofuels that is under development with cellulosic materials, and a number of people highlighted that because it may be a way of avoiding some of the energy costs but without using current food production.
Cellulosic ethanol is a type of biofuel produced from lignocellulose, a structural material that comprises much of the mass of plants. Lignocellulose is composed mainly of cellulose, hemicellulose and lignin. Corn stover, switch grass, miscanthus and woodchip are some of the more popular cellulosic materials for ethanol production.

The World Bank also has blamed the boom in biofuels for the rise in global food prices. That has put Mr. Zoellick in a ticklish position. Before taking his job at the World Bank, he was U.S. Trade Representative, and defended U.S. agricultural positions. In his Thursday news briefing, he didn’t mention the U.S. by name, but he praised sugar-based ethanol of the sort made in Brazil and questioned whether tariffs to block the fuel — such as the U.S. uses — make “economic sense.”