Sir, The Times2 report “Chocolate meltdown” (Mar 11) correctly highlighted the role that hedge funds and banks can play in pushing up the price of food. However, it’s not just hedge funds, such as Armajaro, buying up physical supplies that are pushing up prices.
Among the drivers of high food prices in cocoa, sugar and basic staple foods are banks, pension funds and hedge funds trying to make an easy profit through speculative betting on long-term price rises in food through the futures markets. A massive $300 billion are currently thought to be riding on these markets, which are actually pushing up the price of food. Despite strong global harvests, the UN Food and Agriculture Organisation announced earlier this month that food prices had risen again for the eighth consecutive month to record levels. The price of wheat alone has increased 60 per cent in the past year.
The impacts of this speculation are being felt by millions of the poorest people around the world who are being pushed into worsening poverty and hunger through higher staple food prices. Urgent action is needed to limit this reckless speculation.
Deborah Doane
World Development Movement