Food Commodities Speculation and Food Price Crises

[23 September 2010] BRUSSELS – On the eve of an emergency FAO-meeting devoted to instability in agricultural markets, the UN Special Rapporteur publishes a study analyzing the impact of speculation on food price volatility.

In this briefing note, the UN Special Rapporteur examines the impact of speculation on the volatility of the prices of basic food commodities, and the possible solutions forward.

The study shows that a significant portion of the increases in price and volatility of essential food commodities can only be explained by the emergence of a speculative bubble. In particular, there is a reason to believe that a significant role is played by the entry into markets for derivatives based on food commodities of large, powerful institutional investors such as hedge funds, pension funds and investment banks, all of which are generally unconcerned with agricultural market fundamentals.

ReadPDF “Food Commodities Speculation and Food Price Crises. Regulation to reduce the risks of price volatility”, Briefing note by the Special Rapporteur on the right to food, September 2010