Speculation on food commodities, by the financial lobbies

Speculation on food commodities, by the financial lobbies, you get it on a billion people who steals bread, but also on European countries producing inflation.

A pact against inflation that threatens to make us not return to the levels of twenty years ago, where we already are, but even further back. Why the Coop clamored for in the food? Why the president of Coop Italy, Vincenzo Tassinari, speaks of "perfect storm" if households were to be discharged from the crisis Italian sfiancate another wave of price increases, as requested by the producers, which could give rise 5% in 2013 and in the lists more time the VAT increase?

To answer this question, we must go against the current inflation, as we were salmon in the waters of the global market. So we arrive, going up because, a step up, where we find the prices of food staples (agricultural commodities) from which many of the products that we consume at the table. Corn, wheat, soybeans, sugar, etc.. are having here in 2007 wheelies mind-boggling (doubling of prices in a few months) and subsequent collapses that generate extreme turbulence and market volatility (ie very intense and rapid changes in prices) and are among the major causes of inflationary pressure on shopping cart.

This is nothing new, after all, but a constant concern that accompanies the food and financial crises of the last five years and is supported by the data of FAO, with a +40% for cereals after three months of decline that shows lists the levels high last year. "This swing generates devastating effects on farmers, they would need to invest instead of stability on the crops, and a billion undernourished people in the world who do not have money for bread."

The analysis of Professor Richard Brown, Professor of Political Development from the University of Milan, helps us to understand why the food, such as oil, gold and other commodities, it is always more expensive in a vortex that reduces power consumption and increases poverty on a global scale. The World Bank has estimated that 44 million people have fallen into poverty in 2011 because of rising food prices. What's behind all this? "Look, the causes are varied, but the most important node is the relationship between financial markets and the food that generates volatility."

Continuing along the current, we note that since the war for forty years and the food prices are systematically declined as a result of increased productivity and quality of crops added to the public support to agriculture. It is the turn of the millennium that the trend is reversed. At least four factors, interacting between them, determine the. The first are large areas removed from production for food consumption to make biofuels, which tended to Action Aid and other international NGOs are opposed. Another factor is the growth of incomes and therefore demand for a better diet in huge countries like China, India or Brazil. Third uncontrollable factor is the demographic trend worldwide. Fourth, at least partially modifiable, climate change and making it more virulent and frequent floods and droughts affect the level of macro-regional vulnerability of prices.

"These four factors - continued Professor Moro - all have a role in raising the scales, but do not explain the swings in recent years. There is a fifth factor that can quickly push upwards as downwards, creating the 'volatility' of which we have spoken this is the speculation on food that has been unleashed on the financial markets. "

Present and Futures ...

What is it, in fact, behind the high cost of food over the next decade, according to FAO and OECD, is expected to stabilize at a 20% higher for cereals and 30% more for meat and which affects in varying degrees all consumers? We arrived at one of the highest steps where it is even more difficult, if possible, to intervene given the enormous interests at stake. The answer is financial speculation: speculation on food and on the lives of people with modern telecommunication takes place on the squares, with one click, using futures.

What are they? "Special financial instruments with which it is established 'Today' at what price to buy 'tomorrow'" some good food. Born as a means to govern the market and safer operators by reducing, in fact, the volatility. But they have become instruments of investment and financial speculation. Almost all of today's futures is negotiated between operators who have no direct interest in the field of agriculture. "

The real exchange more often than not the case either (only 30% of futures contracts in the world ends with the purchase of a barrel of oil or a lot of corn): contractors tear up contracts before the deadline, exchanging the difference between the price indicated in the futures and the current price. Futures become so real bets that traders use to groped financial gains with funds made available by savers. The effect is that as financial markets rise and fall abruptly futures prices, like the prices rise and fall of the real product to the market penalizing those who go there for real, or small farmers and poor people from the Horn of Africa to 'Latin America. "It is impressive to see the speed with which changes in international stock markets are reported in the local market. It is unsustainable price increases, but it is also harmful because the sudden descent discourages investment in agriculture anyone invest if you can not predict when it will gain. "

It is useful here to open a parenthesis to say that futures are the main form of derivatives used for agricultural commodities, and derivatives are financial products whose price is hooked to other quantities, such as the value of assets or intangible assets (stocks, indexes financial, currencies, interest rates, etc..) or materials, but not available at the time. The classic example is precisely that of raw materials, goods safer and more valuable on the planet Earth overpopulated and resource crisis, so many things that you can do without, say investors, but not water or wheat to feed his inhabitants.

And so on the one hand the strongest governments are grabbing huge arable land purchased or leased for a plate of beans ("land grabbing"), on the other hand the big financial firms like Goldman Sachs, Morgan Stanley and Barclays Capitals, betting on rising commodities above the most basic rights of humanity. It can do this because they operate in a situation of complete deregulation. "Over the last fifteen years the U.S. Congress has completely deregulated the derivatives market that now exceeds ten times the global gross domestic product." It is written in the file "The hunger is not speculation," the basis of the homonymous awareness campaign promoted by civil society in collaboration with leading non-profit acronyms such as Life, Action Aid International, PIME, ACLI. Together they drafted a charter of intent in view of Milan Expo 2015 (whose slogan is "Feeding the planet, energy for life") which called for new rules preventing financial speculation and a code of ethics that commits the government to not hold derivative securities related to real food.