• Brabeck-Letmathe says food for people, not cars
  • Rabobank analysts say agri-commodity volatility to rise in 2013 

Nestle's chairman, Peter Brabeck-Letmathe, has backed those who criticise the use of food crops for biofuels.

Speaking at the Global Forum for Food and Agriculture in Berlin, Brabeck-Letmathe said that food should be for people, not for cars. He said it was "nonsense" to use food crops for biofuels at a time of rising world food prices, according to a report by Bloomberg at the weekend.

However, Brabeck-Letmathe rejected claims from some quarters that investor speculation causes prices to rise.

Last week, the United Nations' Food & Agriculture Organisation said that average food commodity prices dropped by 7% in 2012 versus 2011.

Many industry experts, though, believe that price volatility - rather than price rises - is a bigger risk.

In a report released today (21 January), Rabobank analysts warned that agricultural markets globally are "undervaluing" risk to supplies of key commodities.

"Record-low stock levels leave agricultural markets, particularly grains and oilseeds, vulnerable to increasing volatility in the year ahead," said Rabobank.

"Longer-term volatility in agricultural markets is also on the rise as the world's incremental demand growth is being met by less reliable production regions," analysts added.