Local energy think tank Asian Institute of Petroleum Studies Inc. (AIPSI) has shared the view of the United States National Biofuels Board (USNBB) that biofuels development has limited impact on food supply and pricing, specially in the Philippines.

AIPSI and USNBB have specifically disputed UK-based Gallagher Review's claim that biofuels may raise food prices.

"While Gallagher Review is specific to the United Kingdom's own renewable fuels policies, it is fair to note that research done by US experts and the US Department of Agriculture has proven that biofuels-related feedstock demand has limited impact on global food supply and pricing," USNBB CEO Joe Jobe said.

He said while gas prices continue to soar to more than $4 per gallon, the addition of biofuels to the US fuel supply is one of the only things keeping prices from going higher.

AIPSI managing director Raffy Diaz, on the other hand, said "to pass on nearly the whole problem of food supply and price as being the result of biofuel (to the level of more than 75 percent of feedstock production ) is outright ridiculous."

He said the impact of biofuel feedstock eating up on food supply is very much below 10 percent on a global basis, mainly pertaining to corn for ethanol and soybean for biodiesel.

"A situation in one country cannot be echoed as being true, globally. But we do know that there are anti-biofuel forces who will jump and bankroll every opportunity to make a mountain out of a tiny molehill on the issue on biofuel," Diaz said.

According to Diaz, the country's biodiesel requirement at one percent biodiesel blend is around 60 to 70 million liters annually because demand for diesel is between six to seven billion liters.

For B2, biodiesel requirement will double to around 112 to 114 million liters by 2009.

"From coco-oil production of 1.4 billion liters per year more or less, the biodiesel component will translate to just four to five percent for B1 and eight to 10 percent for B2," Diaz said.

The AIPSI official noted that coco methyl ester requirement for B1 and eventually B2 is less than 10 percent of total coconut oil production, "so it would be obvious that the steep rise in coco oil price cannot be totally attributed to biodiesel."

Diaz said the coco-biodiesel initiative which was given serious focus at the turn of the new millenium was meant to raise copra price at farmgate level to alleviate poverty in the coconut industry.

He, however, noted that the steep rise in the price of copra and/or coconut oil cannot be attributed anymore to local CME demand.

"Coconut oil has many uses as health food, as surfactant/detergent, as specialty lubes, as fuel additive component, as ingredient for skin care and cosmetics, and many others," he said.

Coconut oil is also one of two plant oil commercially produced that contains medium chain triglyceride, a formula ingredient for infant milk powder.

"In my own view, the excellence of coconut as health food ( i.e. virgin coconut oil) and as fuel additive to mitigate global warming and air pollution, and as excellent biodiesel, has created new high volume demand and is seen as threat on supply availability to the traditional users of coconut oil," he said.

Diaz said the steep rise in coconut oil price is all driven by the other oils since coconut only takes up 3-4 percent of vegetable oil volumes traded on the world market.

The food application for vegetable oils traded in the world market, Diaz noted, is very minimal and it is the technical/industrial applications of coconut oil that maintains its presence on the world commodities market.

He said the upsurge in fuel prices has also contributed to higher copra and coconut oil prices in the local market since it has raised the cost of transporting these commodities.