Two conflicting reports released last month have exposed the gap in data on the impact of futures trading on the agricultural commodities spot markets as a study by IOSCO recommends position limits and increased transparency in global commodity markets.
Speculation in the agricultural commodities has been forced
into the spotlight over the past five years after markets
experienced high volatility and price rises. Food prices alone
have risen by almost 40% this year to July, according to the UN
Food and Agriculture Organisation.
The price rises are devastating for the world’s
poorest, where in some cases, basic food purchases account for
up to 60% of total income. A study by the World Bank found that
in the last six months of 2010, 44m people were pushed into
extreme poverty by rising prices.
Whether speculation is at the root of these price rises is
the subject of heated debate. The debate centres on proving the
causality between increased speculation and food price
Two reports released last month, entitled Broken
Markets: How financial market regulation can help prevent
another global food crisis and The impact of
speculative trading in commodity markets – a review of
the evidence, were commissioned by the World Development
Movement and the Futures and Options Association
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