The Real George Osborne
December 3, 2011 1 Comment
The series has been commissioned by anti-poverty campaigners, the World
Development Movement, ahead of a vote on regulation of food speculation by
banks in the European Union. The group wants George to “do the right
thing” and back effective regulation of food speculation, which drives up
food prices beyond the reach of the world’s poorest people — and has also
added nearly £200 onto UK households’ food bills in the past year.
http://www.therealgeorgeosborne.com/
Futures trading is not trading of food, it is trading of bits of paper. Futures anticipate the market need for commodities and prices of futures will rise and fall accordingly. This gives the actual food market an indication of what the prices will be.
If speculators wanted to push up the price, they would build a big warehouse and buy actual commodities and put them in the warehouse, denying them to the market. But that’s not what’s happening. The trades you are talking of are literally just pieces of paper.
There ins’t much evidence that this has a fundamental effect on actual prices, as it doesn’t effect actual supply and demand. Much the opposite. If the futures price is high, the market responds by growing more of the relevant crop.
Wild weather has affected prices in recent years, so has the increasing world population.
You’d be much better off writing letters to George Osborne asking him why he think the RSPB and WWF have suddenly become the enemies of enterprise.