Food speculation

If we do nothing, we risk having food riots in the poorest countries and also an unfavourable impact on global growth. We want regulation of the financial markets for commodities.”
- Nicholas Sarkozy, French president

We are putting pressure on the UK government to back proposals to regulate betting on food prices in financial markets.

Since July 2010, we have campaigned to raise the issue and it is now firmly on the political agenda in Europe. Proposals for regulation are being drawn up in the EU, but the financial industry, with the help of George Osborne and the UK Treasury, is lobbying hard against them.

These coming months are going to be crucial. The proposals for regulation were published in October 2011 and we will have to keep up the pressure to ensure that they are not watered down by the banking lobby or by the UK government. You can help us now by writing to the Treasury.

What are we calling for?

Regulating food speculation is relatively straightfoward. WDM is calling...

“It is deeply alarming that the greatest proportion of activity in the futures markets no longer involves those in the supply chain but is, instead, taken up by speculators. Food commodities are too important to be played about with by day traders and speculators”
- President of National Farmers’ Union Scotland

Since we launched the campaign on food speculation in July 2010, we've produced and collected a range of resources on the issue. Here are some of the best.

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  Introducing the issue

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  ...

As a regular reader of this blog you know that we’ve been campaigning for regulation of speculation on food prices for the last 18 months or so. We were therefore pleased to see that the topic of this year’s Blog Action Day, on 16 October, is food. 

The idea behind Blog Action Day – originally started in 2007 – is that on one day a year bloggers from around the world unite and write about one particular topic. Previous topics include water, climate change and poverty and last year 5,600 bloggers from 143 countries took part.

On the day itself WDM staff members will be blogging about food speculation. But what about you? Here are three things that you could do:

1. Write a blog post! 

After all, this is the main point of the day. Just register your blog now, then on 16 October post your blog entry on Twitter using the hashtag #BAD11. We’d love it if you were to write about food speculation and you can find lots of resources to help you on our food speculation resources web page. 

2. Take action!

Proposals to regulate food...

It’s no secret that successive UK governments have long favoured a “light touch” approach to regulating the financial sector. And it’s pretty obvious the mess that this has left us in. But until the research published this weekend by the Bureau of Investigative Journalism, most people didn’t quite realise the influence of the sector over the UK’s main governing party.

Figures published by the Bureau show how the proportion of income the Conservative party receive from the City of London has grown over the past year, and now makes up more than half of the total donations it receives. And within the financial sector, more donations come from hedge funds – big players in food speculation – than any other type of contributor.

These donations dwarf the contributions made by other industries – so it’s not surprising that, despite support for action to tackle food speculation from virtually every other sector of society, from the Pope to Starbucks, the UK government is still failing to support the regulation we need to curb...

 Jessica Radford, used to be campaigns and policy intern

The influx of financial participation in the commodity markets has played a key role in causing price rises and volatility. Prices are increasingly affected by the financial markets, rather than the needs of the consumers and farmers.

As you know we are campaigning to stop banks from betting on food and consequently forcing people into poverty and hunger. The food campaign is calling for regulation, which includes restrictions to be put on speculators preventing excessive betting on food prices and futures contracts to be traded on an open exchange with the banks required to provide more information on their activities.

The Ecologist recently went to Mexico, where they spoke to people about the price of maize tripling in a short time. This is the video they produced.

Food speculation - banks betting on food prices in financial markets - is a massive issue facing the world today. In the last few years, we have seen two major food price spikes, pushing millions of people into poverty. These food spikes were caused by speculation and could have been prevented through effective regulation. 

At the World Development Movement we are campaigning to stop banks betting on food and causing hunger. To explain the issue we have produced this infographic. Hope you like it. Please let us know what you think in the comments. 

For more information about how financial speculation impacts on food prices, see our Broken markets report. 

[Click on the image to enlarge it]

Update 5 October 2011: We have corrected the aid figures and their size relative to banks’ profits from food speculation; they now reflect the latest information.

Dan Iles, WDM's south-west mobiliser, interviews Christina Schiavoni of the US Food Sovereignty Alliance.

On day four of the European forum on food sovereignty, I met Christina from the US. I was very interested to find out about what sort of actions are happening over in the US as well the aftermath of the Wall Street Reform Act passed recently to limit financial speculation on food. In this interview she talks about the urban and rural movements for food sovereignty across the US, including dairy producers, supermarket workers and anti-food speculation protests.

What does food sovereignty mean to you?

To me it means the right of people to define their own agricultural policies, rather than those policies being defined by the World Trade Organisation, the World Bank and the IMF, or multinational corporations.

Can you give me some examples of local initiatives that are involved with enacting food sovereignty in the US?

These are local manifestations of food sovereignty, because I really think that...

Dan Iles

On the 3rd day of Nyeleni, we all took part in a meticulously coordinated action in the town of Krems, the host city of the forum. In this picture based blog post, I will explain how their use of colour, music, openness and most importantly local food to put across the idea of food sovereignty to Austrian public. This MUST come to the UK!

The March:

Setting off from the forum, we all congregated by the courtyard and then headed for the town centre. What with there being such a diverse crowd of young and old, men and women, and languages from across europe there was a lot of energy. The samba band was leading the way, which is always a great way of attracting attention from the public as well as providing a musical rhythm for the protest itself.

As we paraded around all the town's supermarkets, a dedicated team of leafleters were on the case, handing out information on the upcoming event (which I will explain about later) to every unwitting passer by. Each time we passed a supermarket we stopped, held a mini rally, handed out more flyers to the customers, and then moved on again:

Dan Iles, WDM delegate to Nyeleni Europe, explains the structure that makes the forum so exciting.

I want to try and explain a bit about the structure of the Nyeleni 2011 forum as I think it is worth emulating in future organisational structures. The way the forum is organised has been based on the way the 2007 Nyeleni forum in Mali was constructed and many of the ideas come from the global South. It has a particular emphasis on non-heirarchical and participatory structure and is dedicated to hearing the voices of a range of sub groups in society, for example young people, women, young parents, workers, producers, consumers, activists, etc. 

They have tried to give all possible groups, types of people, interests and sections of the food movement a say in the decision making process.  In this way, everyone is given a range of environments with which to express their voice and are therefore not held back by the social limiting factors that can occur in these sort of events. I hope this is of genuine interest to some people who want to organise democratic and participatory events that do not exclude people through societal imbalances such as gender,...

Bristol activist; Dan Iles, gives you a tour of Bristol’s food movement on route to Austria to take part in food sovereignty forum  Nyeleni 2011

I've been given the opportunity to represent both World Development Movement (WDM) and Bristol’s community food projects at the European Food Sovereignty Forum, Nyeleni, in Austria. This forum will be a meeting point for around 400 delegates from producers, consumer organisations (food cooperatives, etc), NGOs and community projects from all countries in Europe. It will be an excellent opportunity for food projects across Europe to share ideas and collaborate their actions so as to forge a fully fledged European food sovereignty movement.

My blog posts over the next week or so will be documenting this forum, the decisions made in the working groups as well as profiling the various radical food projects that have been set up in countries across Europe.

First of all however, I am going to write a bit about my thoughts over food sovereignty and tell you all about projects struggling for its realisation in some parts of Bristol.

...

The G20's version of 'food security' or a global movement for a radically different food system?

Amy Horton, food speculation campaign

Today, the agriculture ministers from the G20 countries will meet in Paris to discuss food security and volatile prices. They may add their voice to the growing call for international action against speculators. But their focus is likely to be on ramping up food production, even as the UN’s top expert reminds us that the problem is more about distribution: a third of food is wasted and nearly half of cereal production goes to feed livestock.

Three quarters of the G20 delegates will be male, and only one of them African – though the continent is home to a quarter of the world’s hungry people, only South Africa is a member of this elite group.

Their rarefied meeting sits in glaring contrast to a gathering of 500 people at a purpose-built camp in the village of Nyeleni, Mali in 2007. Hailing from more than 80 countries, they were mainly food producers representing small-scale farmers, urban movements, indigenous peoples and many others. 

A different vision...

The World Development Movement has called for urgent measures to regulate financial speculation on food prices in the wake of the Horn of Africa famine, revealing that the price of food aid has doubled since 2001.

The World Food Programme paid $390 per tonne of food last year, compared with $200 in 2001. On Monday the organisation said it needed an extra $360 million in order to tackle the crisis now affecting more than 12 million people.

Speculation on food prices by investment banks like Goldman Sachs and Barclays Capital has dramatically risen in the last decade, pushing prices to record levels. Around $100 billion has poured into agricultural markets over the past ten years as financial players have looked for new areas to place their money, without a penny of this going to actual improvements in agriculture.

The US has already passed legislation aimed at preventing excessive speculation on food, and similar measures are being debated in the EU. But the UK government is set to block the European proposals. 

Deborah Doane, director of the anti-poverty campaign group the World Development Movement, said...

"Maybe it's time we went the way of Egypt." This was the conclusion of a Nairobi transport worker, who took part in research into how people are responding to the latest spike in food prices. He is not alone. Researchers from the Institute of Development Studies and Oxfam found "significant anger" among many of the communities in Kenya, Bangladesh, Zambia and Indonesia that they visited in recent months.

Many people are being hit hard by spikes in food prices. One retired government official in Naogaon says that when he goes to the market, "The prices often give me a heart attack."

Admittedly, there are some winners from higher prices - such as export sector workers, though many of their gains are down to long struggles for better wages. But there are many losers, who are going hungry or switching to cheaper, lower quality food. In Bangladesh, people complain of having to eat chicken feet or broken eggs.

People are also having to travel further to find affordable food and work longer to pay for it. Much of the heavier burden is being shouldered by women. Families are breaking up as men migrate to seek work or even form relationships with women food traders.

Workers in informal jobs face many hurdles. In March for example, Dhaka’s rickshaw pullers...

For the last year, WDM has been leading the UK campaign to get new rules introduced to tackle food speculation. We've been focusing our efforts on exposing the role of banks, like Barclays, in driving up food prices and we've been mobilising public pressure to get the UK government to support effective regulation on food speculation. 

The European Commission is set to publish a set of financial reform proposals in the autumn which will include measures to address excessive financial speculation which is causing food prices to rocket to record levels. 

European partners

As a UK based organisation, we are focusing targeting our own government, whose policies we know is a major obstacle to getting effective legislation approved. However, the fight for regulation is not one that we can win alone. And so we have been also investing our energies into building a European-wide coalition of campaigners to ensure that decision makers in the EU...

An action plan supposed to address food insecurity launched today by the G20 agriculture ministers has been criticised by campaigners, who say it fails to fully address the root causes of volatile food prices, including financial speculation, which is driving up prices.

Anti-poverty group the World Development Movement said that opposition from countries including the UK had led to the watering down of proposals that could have seen countries commit to setting limits on speculators’ share of the market.

Deborah Doane, director of the World Development Movement said:

Without tackling excessive speculation, the G20’s efforts to rein in volatile food prices will be wasted. The agriculture ministers have ducked controversy, so it falls to G20 finance ministers to address speculation and the hunger and poverty it causes."

The anti-poverty group has called on the UK government to back EU and international efforts to regulate commodity markets. 

Ms. Doane continued:

The UK government’s stance in defence of excessive speculation is untenable. It must put its weight behind European plans for regulation, putting the needs of hungry people before the profits of banks like Goldman Sachs and Barclays Capital.”...

In a report released yesterday, the United Nations called for the regulation of financial speculation on food prices, to prevent “price bubbles”.

Financial gambling by banks, hedge funds and pension funds causes massive hikes in the price of basic foods, making millions of people go hungry. 

The report by the UN’s Conference on Trade and Development says that due to speculation, prices are no longer driven by supply and demand.

Prices can move far from levels justified by the fundamentals for extended periods, leading to an increasing risk of price bubbles.”  

The report calls for more transparency and international oversight of commodity markets.

Our campaign has been ramping up the pressure on policy makers to take action. Last week hundreds of emails were sent to the members of the European Parliament’s economic affairs committee who voted overwhelmingly in favour of tightening up how derivatives are traded. 

But there is still much to do. The main European legislation that will include provisions to comprehensively regulate food speculation will be published in the autumn. In the meantime, we need to get the UK government to back regulation. Please...

Earlier this week, the European Parliament’s economic affairs committee voted overwhelmingly – 36 against 1 – in favour of a draft law to regulate shadowy derivatives trading. Derivatives are complex financial contracts that can be bought and sold and are the way that banks can speculate on food prices. One of the demands of our food speculation campaign is that food derivatives are traded on ‘open exchanges’ where they can be regulated properly and all trading is transparent, in the same way shares are traded on the stock market. 

Just before the vote, our European partners over at Make Finance Work produced an e-action asking MEPs on the economic affair committee to vote in favour of the proposals. In just a couple of days over 2,000 people, including hundreds of WDM supporters, wrote to their MEPs and we believe it had an impact on the outcome of the vote. Thank you for taking part.

The proposals would introduce central clearing – bringing trading out from current secret bilateral deals and allowing regulators to see who is trading what. However, although...

• Campaigners take food speculation protest to Barclays’ AGM
• New research shows true extent of Barclays food speculation activities
• Barclays accused of ‘profiting from hunger’

Following a month of protests at over 22 local Barclays’ branches around the country [1], campaigners from the World Development Movement [2] protested at the Barclays AGM this morning over the banks leading role in food speculation. The campaigners - dressed as Barclays eagles, bankers and selling food at hugely inflated prices - say speculation is fuelling the price of staple foods, and having a disastrous effect on the lives of millions of the poorest people across the world.

The protests come following research published by the World Development Movement yesterday that investigated the extent of Barclays’ involvement in food speculation, and found Barclays to be the UK’s leading bank in food speculation [3].

The report concludes that Barclays could be making as much as £340 million in profit annually from food speculative activities, leading to accusations from campaigners that Barclays is ‘profiting from hunger’. In addition, Barclays have been found to be a key facilitator in helping other financial players – such as pension funds – speculate on food...

Catherine Negus, used to be Campaigns Assistant

The WDM campaign against speculation on food prices has had some brilliant radio coverage in 2011. Our campaigns officer Heidi Chow called in to You and Yours back in January, and with the help of the BBC we’ve been able to make two other programmes available for downloading from the WDM website.

On 13 January BBC Radio 4’s Face the Facts by John Waite, with input from WDM, provided a clear overview of the issue. The programme includes helpful explanations of spot and futures markets, how they are supposed to work, and what they are doing in reality. There are quotes from Jane Anyango, chairperson of Kibera Women for Peace and Fairness in Nairobi, who talked with WDM staff when they visited Kenya last July.

Other authoritative voices are those of Jayati Ghosh, professor of economics at Jawaharlal Nehru University in Delhi, and Michael Masters, a US hedge...

On the front page of the Sunday Times this morning you will see the headline ‘Euro MPs exposed in ‘cash-for-laws’ scandal’ (£). Journalists from the respected Insight investigative team have posed as financial lobbyists and have approached MEPs offering them large sums of money in return for watering down banking reform legislation.

Three MEPs took the bait and were employed by the fake lobbying company on a yearly salary of €100,000. One of those was 56 year old former Romanian deputy prime minister, Adrian Severin, who apparently emailed the journalists posing as lobbyists writing “Just to let you know that the amendment desired by you has been tabled in due time”. He then sent an invoice for €12,000.

The other two MEPs caught up in the scandal were Slovenian foreign minister Zoran Thaler, and former Austrian interior minister Ernst Strasser. It is said that Ernst additionally boasted about serving at least five commercial clients who each paid him €100,000 per year.

These are pretty shocking revelations. But the most telling quote in the Sunday Times expose comes from Adrian Severin, “I didn’t do anything that was, let’s say, illegal or against any normal...

Catherine Negus, used to be Campaigns Assistant

Today marks the launch of Fairtrade Fortnight 2011, a celebration of the most widely-recognised ethical label. Fairtrade sales broke the £1 billion mark last year, showing that even during a recession, many consumers still consider the impact of their buying decisions.

However, there’s a very long way to go before all trade is fair, and it’s unlikely that schemes like Fairtrade can bring this about by themselves. Part of their strength is that by using market solutions and focusing on changing public attitudes, they do not alienate anyone. But this approach is also a weakness. The need for Fairtrade schemes is a clear sign that the current global economic system only makes the rich richer.

Commercial giants

The monopolies of huge companies like Cargill, ConAgra and Unilever and of the supermarkets keep selling prices low at the expense of producers. This keeps farmers in the global south working for survival, with little chance of building up their own economies. Often small farmers, who can be very efficient at producing food and protecting the environment, cannot survive.

Fairtrade supports the income of its producers in the global south, and, says Deborah Doane, WDM’...

Over 100 European and international organisations are calling on the G20 Finance Ministers, who are meeting this weekend, to rein in speculation on food prices by banks, hedge funds and pension funds.

The Finance Ministers will be discussing responses to the record food prices which are at ‘dangerous’ levels according to the World Bank with 44 million more people pushed into poverty since last June. French President Nicolas Sarkozy, currently the head of the G20, is pushing for tighter regulation of commodity markets in order to reduce food price spikes and volatility.

But there are concerns that some governments, including the UK, could try to block reforms in the EU and G20 due to fierce opposition from the banking industry. Strong statements have been made by key EU decision makers, including Commissioner Michel Barnier and the French Government, on curbing speculation, but it remains to be seen whether European financial reforms will deliver.

In a statement signed by the Fairtrade Foundation, Friends of the Earth Europe, New Economics Foundation, Corporate Europe Observatory and over a hundred more groups from around the world, political leaders are warned...

Over 100 European and international organisations are calling for financial speculation on food prices by hedge funds and investment banks to be reined in.

The World Development Movement's response to the High Level Panel of Experts for Food Security and Nutrition consultation on food price volatility.

Press release, 04.02.2011

At a joint press conference, Director-General Jacques Diouf of the UN Food and Agriculture Organisation and the French Agriculture Minister, Bruno Le Maire called financial speculation on food both economically dangerous and morally unacceptable. They called for an international response at the G20 to the record food prices and volatility including regulation of financial speculation on commodity markets. The World Development Movement welcomes this and supports action to tackle dramatic food price rises and volatility by reducing speculation on food by banks, hedge funds and pension funds.

Julian Oram, head of policy at the World Development Movement said:

“We welcome the FAO and French government’s clear and urgent call for action to curb financial speculation on food. Banks and hedge funds are playing a key role in causing the current record food prices. When speculative flows of hot money pour into commodity markets, it dramatically pushes up the price of basic foods. There are of course long-term upward pressures on food prices, for example due to the impacts of climate change and the use of land for biofuels. But this doesn’t explain the sudden and very dramatic prices rises that we are seeing now and in 2008 during the food...

The World Development Movement criticised the findings of the Beddington report which promotes the introduction of genetically modified (GM) crops as a key solution to global hunger.

The focus on GM in the Chief Scientist's report is a red herring and does not correctly identify the real causes of hunger.

The World Development Movement's director, Deborah Doane said: "The Beddington report does not accurately reflect the real cause of hunger in developing countries. The current record food prices are down to banks and hedge funds betting on food. The hot speculative inflows of money into commodity markets are dramatically pushing up the price of foods like bread, sugar and corn.

 "GM is not a magic bullet to cure global hunger. If the UK government really wants to reduce hunger in the developing world, they should break free of the grip of the GM and banking lobbyists, and crack down on predatory speculation by banks and hedge funds which will ensure stable and lower food prices. Furthermore, the UK government should be focused on supporting strengthening local markets and investing properly in small scale farmers in developing countries.

 "There is a long-term, gradual upward pressure on food prices, for example due to the impacts of climate...

Current soaring food prices are being worsened by record levels of financial speculation, according to a leading UK anti-poverty group. Latest figures from the World Development Movement reveal that hedge funds, investment bankers and pension funds have poured over $200bn into food markets since the financial crisis, betting on the rising price of food.

This huge wall of speculative money has now reached record levels according to the US commodities regulator [1]. This has caused the market to over-react to shortages in supply or rising demand, pushing food prices ever higher.

This week the UN’s food price reached a record high and food riots broke out in Algeria as the impacts begin to be felt around the world [2]. Food prices have now risen above those seen during the global food crisis of 2008 [3] when riots broke around the developing world and over 1 billion went short of food.

Many speculators are simply trying to avoid inflation by throwing money into food markets, betting on long term rising food prices and not reflecting the current state of global food markets. Much of this money has come from efforts to deal with the financial crash like the banking bail out and so-called ‘quantitative easing’ in Europe and the US.

The World...

Heidi Chow, Food campaigner

Last Friday, WDM’s human blackjack game won Third Sector’s digital campaign of the week. Third Sector is the UK’s leading publication for the voluntary and not-for-profit sector and has over 80,000 readers.

Third sector praised WDM’s web based campaign:

"The subject area of the campaign is a difficult one to convey…However, WDM has taken a fun and interactive approach to drive home its message, meaning it is less complex and more engaging…"

The online game has had over 5000 views and takes people on a journey into the shadowy world of food speculation. Players select a character to play and as they play the card game, blackjack (also known as 21 or pontoon), they discover the gambling that takes place every day in the financial markets where bankers’ betting on food prices is driving up the price of basic food across the world.

The game is still online, play it here and get yourself onto the leaderboard. Remember all that is required is compassion – not cash.
 

Thanks to everyone who played human blackjack last week! Hundreds of people took part in our online game to learn more about food speculation and join the fight to stop bankers from betting on food. Also congratulations to Mary from Glasgow who won our prize draw of people who took part - a box of Lush ethical bath goodies is on its way to you!

Though the game was fun (I tried hard to get in the top 10 of the leader board but couldn't beat the top scorers!), the story of human blackjack is a real one. Everyday bankers are betting on food prices in financial markets, making basic foods unaffordable to millions in developing countries. The battle to stop the bankers is going on right now - on both sides of the Atlantic. President Obama signed the Dodd-Frank Reform Act earlier in the year which gave the US regulators the powers to clamp down on food speculation. The US regulators now have the job of working out the details but bankers have been lobbying hard for exemptions from the rules.

US campaigners...

Bexhill and Hastings WDM play a game of 'Human Blackjack' with George Osborne showing how the government's allowing bankers to keep betting on food.

Brighton & Hove WDM explaining the complexities of food speculation to passers-by in Brighton, using a giant snakes and ladders' board

Sheffield WDM created an ingenious 'plate-spinning' game at a recent event to involve people in our food campaign

Thank you for joining our campaign to stop bankers from speculating on food prices. Their activities have made food unaffordable for poor people around the world, spreading hunger and malnutrition.

We will keep you updated with the latest actions and news on the campaign over the coming months.

We will also invite you to take part in the world’s first online game of human blackjack on 26th November 2010. You can join in anytime from 12 midday to 12 midnight. Compassion, not cash, is all that’s required.
 

When Jayati Ghosh was in the UK a couple of weeks ago we took the opportunity to interview her about the 2007-2008 food crisis, food security and the financial crisis. This is what she had to say.

• New figures produced on eve of World Food Day reveal new wave of financial speculation on wheat and corn
• Speculation drives surge in wheat and corn prices to two-year highs

New evidence that speculation on food by hedge funds, pension funds and investment banks is fuelling the rise of bread and other basic foods has been released by anti-poverty campaigners on World Food Day, October 16, 2010.

The World Development Movement has calculated that over the summer, financial speculators in Chicago alone bought up corn futures contracts equivalent to nearly 1.7 billion bushels [1] – more than the annual consumption of Brazil, a country of some 260million people and the world’s third largest consumer of corn.

The figure for wheat over the same period was 241 million bushels [1], equivalent to seven times the amount consumed by Kenya, or half the UK’s total annual wheat harvest.

Between April and September 2010, world prices for wheat rose by over 40 per cent, while corn has risen by over 30 per cent. The campaigners say that these prices rises, which are the highest since the food crisis that gripped the world in 2008, are contributing to higher inflation in the UK for basics foodstuffs such as bread and pasta in the UK, as well causing...

We are lobbying the UK government to demand tighter regulation of commodity speculation, which our report The Great Hunger Lottery reveals creates market volatility and sharp rises in the price of basic food commodities.

Maize, the staple food in Kenya, is gambled on in global commodity markets. In 2008, maize was subject to a 100% cost increase, which meant that many of the poorest people in Kenya went hungry, lost their livelihoods and suffered health problems.

In July 2010 some of our staff went to Kenya to speak to people about the effects of the food price rises. Here are some of their stories.

Today, there are many stories about food price rises - hitting poorer people in Mexico and countries in Africa, but delivering fat profits for the likes of contraversial agribusiness, Cargill, which is the world's largest agricultural commodity trader.

In the Daily Mail, climate change is blamed, stemming from academics studing extreme weather events and the impact on food production - they recommended more investment in agriculture and weather resistant crops.

Over at the BBC, they are asking you why you think Africa is still hungry which will culminate in a phone in on World Service this afternoon, should make interesting listening.

And the FT, they highlight that Cargill has made bumper profits because corn prices are at a two year high, that tortilla riots in Mexico in 2006 were a sign of things to come, and that there is a stampede to buy corn because of a reported drop in supply.

With the exception of the...

The World Development Movement believes that a key reason that food prices rises have been increasing dramatically is due to excessive speculation in commodity markets by investment banks and hedge funds and that the UN FAO should be coming out more strongly against excessive speculation.

Dr Julian Oram, who is attending the UN FAO emergency summit in Rome commented:

"There is a clear narrative emerging from the meeting of, ''crisis? what crisis?' Looking at the numbers we're not facing an imminent food shortage, such as we saw in 2007-08. What's interesting is that the current jump in grain prices seems to be driven by markets, not supply and demand. There's a strong view that we're  witnessing a speculation-induced food price spike.

"We've heard some concrete ideas at today's sessions to reign in excessive speculation on commodity markets, and it's encouraging to hear more and more governments falling in line behind these proposals."

“Food experts are telling us that global grain stocks are fine and there’s no imminent shortage. The recent price movements we’ve seen can only be explained by opportunistic speculators snapping up food derivatives contracts, in order to make a quick buck. This kind of activity benefits no one, and it’s up to the...

The World Development Movement (WDM) has said proposals to establish three new European banking regulators could help prevent food crises, as wheat price rises fuelled by financial speculation trigger bread riots in Mozambique.

WDM has been pushing for urgent action to prevent banks and hedge funds engaging in excessive speculation in food derivatives markets, which drove the 2006-2008 food price crisis [1] and is fuelling the recent wheat price spike. Wheat prices have rocketed nearly 70% since January, causing riots in Mozambique this week in which seven people have died.

Negotiators from the European Commission, European parliament and Council of Ministers yesterday agreed to establish the three watchdogs, which will include a European Securities and Markets Authority covering derivatives as well as other markets.

Deborah Doane, director of the World Development Movement said:

"The feeding frenzy on wheat derivatives is once again causing hunger and unrest in the world’s poorest countries. It is essential that we end the reckless speculation by big banks and...

Yesterday afternoon, James, Kiama Kaara from Kenya Debt Relief Network and I drove to Thika, a medium-sized town 40km north east of Nairobi along a bustling road lined with traders, construction workers and shops for a meeting with Zachary Makanya from the PELUM Association.

PELUM, which stands for Participatory Ecological Land Use Management, are a network of civil society organisations and NGOs working with small-scale farmers from East, Central and Southern Africa. Their vision is an inspiring and humbling one and what Zachary told us was very clear. Kenyans are still not seeing an improvement in their quality of life despite decades of aid money being poured into the country by mostly good-intentioned by often ill-informed and patronising donors and NGOs. The effects of aid dependency and the legacy of colonialism mean that the urgent process of ‘decolonising the mind’ must now start in earnest if African nations, Kenya included, are to resist the fierce and bullish march of globalisation and industrialisation, which is already wiping out traditional knowledge, languages, indigenous communities and the natural environment.

...

Kate Blagojevic

Today, we launched a report showing how banks speculate on foods causing their price to rocket, increasing hunger in developing countries. Yesterday the Mail on Sunday revealed that a hedge fund bought over 250,000 tonnes of cocoa beans, a move designed to make millions for the hedge fund but losses for people in the UK who are partial to a Twix or farmers in developing countries who are finding it impossible to plan what to grow when the prices are rising and falling like a yo-yo.

Banks and hedge funds ‘buy’ cocoa and other food all the time but they don’t normally request delivery and stash them in warehouses in Liverpool and London. Usually, they buy and sell without ever seeing a single bean or grain, they only see money. Prices rise and fall as a mirror image of speculative hot money flooding in and hot footing it out.

You may have heard the author of our report, Tim Jones on BBC Radio 4 Today programme this morning. In the Guardian today our report was greeted...