Food Speculation

In September, The Independent reported,

"Barclays has made as much as half a billion pounds in two years from speculating on food staples such as wheat and soya, prompting allegations that banks are profiting handsomely from the global food crisis. Barclays is the UK bank with the greatest involvement in food commodity trading and is one of the three biggest global players, along with the US banking giants Goldman Sachs and Morgan Stanley, research from the World Development Movement points out. [....] Since deregulation allowed the creation of such funds in 2000, institutions such as Barclays have collectively channelled an astonishing $200bn (£126bn) of investment cash into agricultural commodities, according to the US Commodity Futures Trading Commission." (1/9/2012)


The draft legislation approved today (2/11/2012) introduces mandatory limits on harmful speculation which is fuelling price volatility on global agricultural commodity markets. European Member States must now move swiftly to confirm and toughen up the proposed rules.

European Union Member States will now be asked to incorporate strong rules to limit speculation on food commodities into the Markets in Financial Instruments Directive (MiFID)

“Members of the European Parliament across the board have sent a clear signal to the Council that mandatory limits on speculation are a ‘must’. [...] Cracks in the text adopted today still need to be filled during talks with Member States to make sure it effectively staves off excessive speculation. This is crucial for the millions in poor countries who are hit by high and unpredictable food prices, and for families in the EU who feel the impacts of rising food bills.” (Marc Olivier Herman, EU Policy Adviser)

Markus Ferber (EPP) stressed “the need to reduce spot markets so as not to create perverse rules whereby people in the third world cannot buy food” and stressed “the need to erode speculation (…) through strict limits and strict ceilings for positions.”  

Thomas Mann (EPP) said: “It is important to have commodity position limits, helping to stave off excessive speculation.” 

Robert GOEBBELS (S&D) said “We need to build proper barriers against commodity and food speculation”.  

Arlene McCarthy (S&D) used the words “immoral and unjust” to qualify excessive food speculation.   

Sharon Bowles (ALDE), in relation to food commodities, said that she supported mandatory position limits because “it’s better to be safe”.  

Sven Giegold (Greens) underlined the importance of MiFID in relation to the transparency and regulation of commodity trading.

Jürgen Klute (GUE/NGL) declared the text was “a good step towards protecting against food price speculation”.

The Research neeeds to be read. Further information on the harmful effects of food speculation.

We need to take action:

 Sign the Petition.

The Oxfam Campaign.

Oxfam's private sector adviser, Rob Nash, said: "The food market is becoming a playground for investors rather than a market place for farmers. The trend of big investors betting on food prices is transforming food into a financial asset while exacerbating the risk of price spikes that hit the poor hardest." (1/9/2012)

Understanding the issues ... "The real hunger games: How banks gamble on food prices – and the poor lose out" The Independent Sunday 01 April 2012