I expect India to overtake China in population around 2030. In 20 years India will have 1.5 billion inhabitants and China as well. These 3 billion people will be 40% of the global population! Thus, the commodity consumption from these two countries alone will be staggering (Figure 1.8).

Still the question remains: we now have 7 billion people on Mother Earth. The global population between 1987 and 1998 increased from 4 to 5 billion people. Why did commodity prices not increase simultaneously? Prices of commodities — in real terms, adjusted for inflation — have not risen dramatically. Why not? It just shows that prices are sensitive to consumption and in recessionary times like in the 1990s less consumption means lower commodity prices. Thus, the key with commodity prices is personal income, personal wealth, and jobless rates — all

1.9 Oil, and First — and Second-Generation Biofuels

factors that determine commodity consumption. If indeed the standard of living of the poorest of the 7 billion people would improve, we would see a substantial increase in commodity prices.

1.9