A coalition of 183 social justice and civil society groups, including 76 U.S.-based organizations and 107 international groups from 29 countries, signed a letter appealing to President Obama and the U.S. Congress to re-regulate the commodities market as a means of preventing continued food price speculation – a practice food poliocy experts claim was a factor in the development of the food crisis, and continues to complicate the cost of foodstuffs.
Speculation in commodity markets occurs when businesses– such as hedge funds and investment banks — buy or sell raw or primary products in international markets in hope of making profits down the road.
The letter’s signatories were largely from farm, food, hunger, faith-based and international development groups, collectively railed against financial institutions for taking such risks and the issue’s lack of oversight:
“A significant part of last year’s food price fluctuations were the result of excessive speculation in the commodities markets by the very hedge funds and investment banks that helped create the current economic meltdown….and could have been stopped with sensible rules that, if enforced, would have staved off the malnutrition and starvation that was caused by excessive gambling of food prices. Important reforms are needed now to prevent mega-investors from viewing the futures market like a casino where they can gamble on hunger.”
Posted by Sara Chupein
