On the brink of another global food crisis
WDM food campaigner Amy Horton writes in the Guardian today that in the context of a major drought in the US, food speculators are driving up cereal prices, underlining the inherent vulnerability of a system in urgent need of reform. She notes that:
Biofuels – which last year swallowed almost 40% of the US maize harvest – have also been highlighted as part of the problem. In the US, pressure is growing to abandon targets for biofuels in car fuel. Livestock farmers are warning they won't be able to afford to feed their animals.
This is all well and good. But missing from the lineup have been financial speculators, who have piled back into the market. Want to know what a brewing food crisis looks like to them? Last week, US hedge fund manager Peter Sorrentino, commented: "It's like a big money tap has been turned on."
By June, markets in food derivatives were awash with $89bn in speculative cash. That figure is courtesy of Barclays, the UK's top food speculator, which earlier this year highlighted speculation as a "key driver" of rising prices.
Read the full article on the Guardian's Poverty Matters blog.