Abstract for: Analysis of Global Food Market and Food-Energy Price Links: Based on System Dynamics Approach

The world food and energy prices are becoming increasingly linked. Food vs. fuel is the dilemma regarding the risk of diverting farmland or crops for biofuels production in detriment of the food supply on a global scale. One systemic cause for the price rise is held to be the diversion of food crops (maize in particular) for making first-generation biofuels. An estimated 100 million tonnes of grain per year are being redirected from food to fuel. The objectives of this study are firstly to build a simulation model, based on system dynamics approach, for not only analyzing the global food market but also forecasting the global food demand, production, and stock, and secondly to examine the food-energy links mechanism by analyzing biofuel related technology level and progress, expected biofuel demand and price, biofuel production capacity and facilities, and petroleum market mechanism. a causal link from the oil price to the biofuel demand is positive, meaning that an increase in the oil price results in an increase in the biofuel demand. There are several more positive links: a link from the biofuel demand to the biofuel price, a link from the biofuel price to the oil demand, and a link from the oil demand to the oil price.