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The report cautions that higher oil prices could have spillover effects on other commodity markets, especially food. It notes that energy accounts for about a third of the cost of producing cereals and that higher fuel prices could increase transportation costs and reduce trade flows. It also points out that higher oil prices could stimulate biofuel production, which could divert land and crops away from food production. The report stresses that energy-market turmoil could intensify food insecurity, especially in low-income countries that are net importers of both food and fuel.
