Speculative frenzy is hurting consumers warns charity

• Price of world’s biggest food crop doubles 
• Latest official figures show 5.8% annual rise in UK food prices 

The World Development Movement has warned that a new ‘summer of speculation’ is fuelling record food prices, as new figures show that financial betting on maize prices has contributed to a doubling in the cost of corn over the past year. 

The anti-poverty group is calling for regulation to curb financial gambling on the price of basic foods, which international experts say is contributing to skyrocketing prices and pushing millions of people into hunger and poverty.

The price of maize – more of which is grown than any other staple food crop­ – has increased by 102% since April 2010. New research from the World Development Movement reveals that hedge funds, investment banks and others own futures contracts for maize worth $15.7 billion, up 127.5% from a year ago. 

Two of the UK’s most popular foods, popcorn and cornflakes, are made from maize. It is Africa’s most important staple food, and a key staple in many other parts of the world. 

Rising food prices have driven an estimated 44 million people into poverty in developing countries since last June, according to the World Bank.

People in the UK are also feeling the pinch, with food prices across the board rising here by 5.8 per cent over the last year, according to the Consumer Prices Index released today.

The UN called last week for greater transparency and tougher international oversight of commodity markets. The US and EU are both moving to reign in speculation on commodities. But the UK government is opposing prospective limits.

Deborah Doane, director of the World Development Movement, said today:

The weekly shop is becoming more and more expensive for families in the UK. And for poor families in developing countries, who spend 50 to 90% of their income on food, price hikes can be disastrous as people cannot afford to feed themselves and their children. 

Banks earn massive profits from betting on food, while the rest of us lose out. Tackling excessive speculation on food will not solve all the problems of our global food system, but it will help protect consumers and businesses in the UK and around the world from artificial price bubbles. Food is essential for human survival and our government must help ensure that it is not subject to financial gambling.”

Find out more about food speculation

For more information, call Miriam Ross on (+44) (0)20 7820 4913, (+44) (0)7711 875 345 or email miriam.ross@wdm.org.uk