Deadly Greed: The Role of Speculators in the Global Food Crisis

Investors, sensing opportunity in climbing food prices, made record profits in the commodities markets, including wheat, corn, rice and palm oil. “Commodity speculation spread long ago from standard products like oil and gold to anything edible and available for trade on the Chicago Futures Exchange,” write Beat Balzli and Frank Hornig for Spiegel Online. The futures market allowed farmers to anticipate prices, plan crops and arrange deliveries. But pricing affects behavior – and some analysts suggest that the speculation has exacerbated hoarding and shortages, adding to hunger woes in some of the world’s poorest countries. The crisis is severe, with riots breaking out around the globe. Still, financiers develop products that profit from the scarce food products. Export bans, price controls and other forms of government intervention could aggravate the shortages. The Commodity Futures Trading Commission, a regulatory body in Washington, is holding hearings, and analysts warn that, in some places of the world, food might not be available for any price. – YaleGlobal