Market News

Do speculators contribute to food insecurity?

Agriculture ministers from 48 nations met in Berlin this past weekend and called on the G-20 nations to do something to fight the manipulation of prices in agricultural markets. The ministers say price volatility and speculation on international ag markets could pose a threat to food security. Food riots have already occurred in Tunisia and Algeria. The U.N. Food and Agriculture Organization’s global food price index of 55 commodities has increased for six consecutive months setting a new record-high last month.

French Agriculture Minister Bruno Le Maire says there is a need to limit speculators who are strictly in the markets to make a profit, “Which undoubtedly enriches a lot of people but which impoverishes the rest of the planet.” Le Maire will host G-20 ag ministers in Paris in May or June and he tells BusinessDay they will work to have “concrete solutions by the end of the year.” Some have suggested the World Bank and similar organizations create a global grain bank to help smooth-out volatility.

FAO says world food production needs to increase by 70 percent by 2050 to feed an estimated 9.1 billion population by then.