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Page added on September 13, 2011
‘Out of Control’ Food Markets Need Rules
New rules are needed to limit the influence of financial speculation and stabilize food markets that are “out of control,” an anti-poverty campaign group said.
Regulators in the U.S., the European Union and the Group of 20 should move trading of derivatives from over-the-counter markets to regulated exchanges and introduce position reporting, the London-based World Development Movement said in a report today. Individual traders and speculators should also be limited in the share of markets they can control, the group said.
“Effective regulation can tackle excessive financial speculation and prevent it from driving food prices higher,” the group said in a report titled “Broken Markets.”
Financial speculators control more than 60 percent of some commodity markets, compared with 12 percent 15 years ago, according to the report. Regulation might limit financial speculation to a 25 percent share, the group said.
“This financial takeover of commodity markets has effectively broken them, undermining their ability to fulfill their basic intended functions,” it said.
The U.S. Commodity Futures Trading Commission has delayed consideration of rules limiting speculation in oil, natural gas, wheat and other commodities until Oct. 4, a person with direct knowledge of the matter said yesterday. The agency proposed speculation limits in January as one of more than 40 rules required by the Dodd-Frank Act, the financial-overhaul enacted in July 2010.
2 Comments on "‘Out of Control’ Food Markets Need Rules"
Johny K. on Tue, 13th Sep 2011 9:43 pm
Maybe the droughts all over the world and other global warming related causes are the cause of rising food prices, and not speculation?
You can speculate on gold, because it is very easy to store. You can even speculate on oil, if you have a large enough oil tanker to store excess oil for a long time. But it is next to impossible to speculate on food. All the food you buy, you must sell it very quickly before it rots. If you don’t, you loose all the money you invested.
Of course, all the official big news agencies like Bloomberg are forced to tell the official (government-approved) story and not the real one.
Kenz300 on Thu, 15th Sep 2011 3:47 pm
Maybe adding a billion people to the planet in the last 12 years and another billion in the next 12 years has something to do with changing the balance between supply and demand.