Food campaign news
Record food prices worsened by banking speculation
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 . 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 . Food prices have now risen above those seen during the global food crisis of 2008  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 Development Movement are campaigning to stop excessive speculation on basic foods . Regulations are being developed in the US and EU to improve transparency and reduce excessive speculation, however these are under threat from intense lobbying by the financial services industry.
Murray Worthy of the World Development Movement said:
“Food isn’t an asset; it’s fundamental to human life. These markets exist to allow people to buy and sell food but are now being used to make huge profits for speculators, at the expense of produces and consumers. Profiteering by financial speculators is worsening this food crisis, further inflating prices both here in the UK and in the developing world.”
“These markets need to be brought back under control, limiting excessive speculation by hedge funds and investment bankers, ensuring the markets are fully transparent. Stopping food speculation can help to avoid the levels of food inflation we’ve seen and help to ensure more people have access to essential food.”
Contact: Murray Worthy, 020 7820 4900, firstname.lastname@example.org
Notes to editors
1. Bart Chilton, one of five voting members on the US Commodity Futures Trading Commission, the US commodities regulator, quoted in Are Speculators Adding to World Hunger? - http://www.cnbc.com/id/40958201
2. UN Food and Agriculture Organization (FAO) Food Price Index January 2011 - http://news.yahoo.com/s/ap/20110106/ap_on_re_af/af_algeria_riots
3. Youths riot in Algeria over high food prices - http://news.yahoo.com/s/ap/20110106/ap_on_re_af/af_algeria_riots
4. Further details on the World Development Movement’s campaign can be found at http://www.wdm.org.uk/food