Profiting off hunger: Wall Street makes big gains over food price spikes
Powerful firms like Goldman Sachs have made hundreds of millions of dollars in food future trades. Critics accuse them of profiting off starvation and market manipulation, while traders claim their profits are due to increasing consumption in China.
World food prices tracked by the UN Food and Agriculture Organization (FAO) have more than doubled in the past 10 years. The FAO’s Food Price Index, which baskets prices for five prime food commodities, peaked in 2008 and 2011, each time rising more than 50 percent from the previous year. The latest price spike was one of the key factors that triggered the series of uprisings in the Arab world resulting in the fall of several governments.
The year 2013 may see another price hike, following the worst draught in the US in 50 years and poor harvests in Russia and Ukraine. The UN has warned that the world may be approaching a major hunger crisis.
At the same time, the industry is bringing millions in profits to those who rushed to invest in food. Goldman Sachs made an estimated $400 million in 2012 from investing its clients’ money in a range of “soft commodities,” from wheat and maize to coffee and sugar, according to an analysis by the World Development Movement (WDM).
“While nearly a billion people go hungry, Goldman Sachs bankers are feeding their own bonuses by betting on the price of food. Financial speculation is fueling food price spikes and Goldman Sachs is the No, 1 culprit,” Christine Haigh of the WDM told the British newspaper The Independent.
The London-based organization – along with similar NGOs like Foodwatch, Oxfam, or Weed (World Economy, Ecology and Development) – have for years blamed financiers for inflating food prices, or for at least making the market dangerously volatile.
They argue that the amount of speculative money is too big in proportion to the physical inventories of the commodities. Deregulation in the late 1990s allowed financial institutions to bet on food prices, resulting in some $200 billion being poured into the market.
For example, hedge fund Armajaro virtually single-handedly sent the global price of cocoa to a 33-year high in July 2010 by buying around 15 percent of global cocoa stocks.
The overall effect of speculation on food prices is an issue of dispute. Influential analysts, such as US economist Paul Krugman, have argued that speculation is a marginal factor compared to rising demand from developing countries, as well as the expanding production of corn and maize for biofuels at the expense of foodstuffs.
Diagram from “The Food Crisis: Predictive validation of a quantitative model of food prics including speculators and ethanol conversion” By Marco Lagi,
A study by the New England Complex Systems Institute last year showed that the Food Price Index should only change if ethanol production had an impact. The study estimated that a 2008 ethanol price hike was largely due to speculation, while a 2011 spike was significantly fueled by investors.
Many financiers dismiss the accusations, and say they will continue bidding against food prices. On Saturday, Deutsche Bank Co-Chief Executive Juergen Fitsche told the Global Forum for Food and Agriculture that Germany’s biggest lender “will continue to offer financial instruments linked to agricultural products.”
“Agricultural futures markets bring numerous advantages to farmers and the food industry,” he said.
Others seem to be yielding to pressure. Last year, several German banks, including the second-largest Commerzbank, ceased to speculate on basic food prices for moral reasons.
- How The Fed’s Quantitative Easing Increases World Hunger (triplepundit.com)
- Goldman bankers get rich betting on food prices as millions starve (independent.co.uk)
- UN blames food price rises on trading in agricultural commodities (guardian.co.uk)
No comments yet.
or go to
The Cover-up of US War Crimes
By Sherwood Ross | March 16, 2011
The Korean War, a.k.a. the “Unknown War,” was, in fact, headline news at the time it was being fought (1950-53). Given the Cold War hatreds of the combatants, though, a great deal of the reportage was propaganda, and much of what should have been told was never told. News of the worst atrocities perpetrated against civilians was routinely suppressed and the full story of the horrific suffering of the Korean people—who lost 3-million souls of a total population of 23-million— has yet to be told in full. Filling in many of the blank spaces is Bruce Cumings, chair of the Department of History at the University of Chicago, whose book “The Korean War” (Modern Library Chronicles) takes an objective look at the conflict. In one review, Publishers Weekly says, “In this devastating work he shows how little the U.S. knew about who it was fighting, why it was fighting, and even how it was fighting. … continue
Aletho News Original Content
By Aletho News | January 9, 2012
This article will examine some of the connections between the US and UK National Security apparatus and the appearance of the anthropogenic global warming (AGW) theory beginning after the accident at Three Mile Island. … continue
Also by Aletho News:
March 8, 2011
February 25, 2010
February 7, 2010
December 26, 2009
December 4, 2009
May 9, 2009
Visits Since December 2009
- 2,896,243 hits
Follow Aletho News on TwitterMy Tweets
rediscover911com on French ‘Proof’ Tha… Brian Harry, Austral… on US to launch Minuteman III ICB… Brian Harry, Austral… on US sends nuclear sub to South… Brian Harry, Austral… on US can’t take pressure anymore… traducteur on US can’t take pressure anymore… Stan Squires on With Error Fixed, Evidence Aga… Brian Harry, Austral… on May ready to launch nuclear we… rediscover911com on Okinawans call for U.S. milita… traducteur on Fools Rush In: Europe Pursues… Anthony Clifton on Make No Mistake: There is a me… FireAnt on With Error Fixed, Evidence Aga… traducteur on Challenging Racism isn’t … Brian Harry, Austral… on US, Israel two sides of same c… Brian Harry, Austral… on While God Blesses America, Pro… 5 dancing shlomos on Why Not a Probe of ‘Israe…
- US missile shield aims to cover sudden nuclear strike against Russia – General Staff April 27, 2017
- French ‘Proof’ That Assad Used Sarin in Khan Sheikhoun Turns out to Be Complete BS April 26, 2017
- Japan Proceeds With Controversial New US Air Base on Okinawa April 26, 2017
- Lavrov: US Inability to Ratify Nuclear Test Ban Treaty Raises Questions April 26, 2017
- South Koreans protest movement of US THAAD Missile System April 26, 2017
- US to launch Minuteman III ICBM to show ‘nuclear capabilities’ amid N. Korea tensions April 26, 2017
- Dissent on the Lower East Side: the Post-Political Condition April 26, 2017
- As Protests Rage in Venezuela, US Media Silent on Pro-Government Movements April 26, 2017
- Chavista Trade Unionist Kidnapped and Murdered in Venezuela April 26, 2017
- Science Marchers, Secretary Perry’s Memo and Bill Nye’s Optimism April 25, 2017
- What The IPCC Said About Glaciers In 1990 April 25, 2017
- US can’t take pressure anymore in Afghanistan April 25, 2017
- Decoding the American Jewish Zionists’ Rise to Power April 25, 2017
- Proposed US anti-Hezbollah bill will harm Lebanon April 25, 2017
- Canadian Missionaries in Africa and the NGO Model April 25, 2017
- US Media: Simple Tricks to Provide Distorted Picture of Political Reality April 25, 2017
- US sends nuclear sub to South Korea amid rising tensions with North April 25, 2017
- Shambolic Doings in Washington April 25, 2017
- Debunking Trump’s Casus Belli in Syria April 26, 2017
- Requiem for the Suicided: the DC Madam April 25, 2017
- VIDEO: Corbyn lays out Labour’s campaign message for the coming election April 25, 2017
- Graun celebrates Macron’s avowal to despoil working people, wreck infrastructure & enrich banking class April 24, 2017
- US Provocation and North Korea: Pretext for War with China April 24, 2017
Looking for something?
CategoriesAletho News Civil Liberties Corruption Deception Economics Environmentalism Ethnic Cleansing, Racism, Zionism Fake News False Flag Terrorism Full Spectrum Dominance Illegal Occupation Islamophobia Mainstream Media, Warmongering Militarism Nuclear Power Progressive Hypocrite Science and Pseudo-Science Solidarity and Activism Subjugation - Torture Supremacism, Social Darwinism Timeless or most popular Video War Crimes Wars for Israel
Tags9/11 Afghanistan Africa AIPAC al-Qaeda Argentina BBC Benjamin Netanyahu Brazil Canada Central Intelligence Agency China CIA CNN Colombia Da’esh Donald Trump Egypt EU European Union FBI Federal Bureau of Investigation France Gaza Germany Hamas Hebron Hezbollah Hillary Clinton Honduras Human rights India International Solidarity Movement Iran Iraq Iraq War ISIL ISIS Israel Israeli settlement Japan Jerusalem John Kerry Latin America Lebanon Libya Mexico Middle East Military National Security Agency NATO New York Times North Korea NSA Obama Pakistan Palestine Press TV Qatar Russia Sanctions against Iran Saudi Arabia Syria The Guardian Turkey UK Ukraine United Nations United States USA Venezuela Washington Post West Bank Yemen Zionism
Contact:atheonews (at) gmail.com
This site is provided as a research and reference tool. Although we make every reasonable effort to ensure that the information and data provided at this site are useful, accurate, and current, we cannot guarantee that the information and data provided here will be error-free. By using this site, you assume all responsibility for and risk arising from your use of and reliance upon the contents of this site.
This site and the information available through it do not, and are not intended to constitute legal advice. Should you require legal advice, you should consult your own attorney.
Nothing within this site or linked to by this site constitutes investment advice or medical advice.
Materials accessible from or added to this site by third parties, such as comments posted, are strictly the responsibility of the third party who added such materials or made them accessible and we neither endorse nor undertake to control, monitor, edit or assume responsibility for any such third-party material.
The posting of stories, commentaries, reports, documents and links (embedded or otherwise) on this site does not in any way, shape or form, implied or otherwise, necessarily express or suggest endorsement or support of any of such posted material or parts therein.
The word "alleged" is deemed to occur before the word "fraud." Since the rule of law still applies. To peasants, at least.
This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more info go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.
This is information for anyone that wishes to challenge our “fair use” of copyrighted material.
If you are a legal copyright holder or a designated agent for such and you believe that content residing on or accessible through our website infringes a copyright and falls outside the boundaries of “Fair Use”, please send a notice of infringement by contacting email@example.com.
We will respond and take necessary action immediately.
If notice is given of an alleged copyright violation we will act expeditiously to remove or disable access to the material(s) in question.
All 3rd party material posted on this website is copyright the respective owners / authors. Aletho News makes no claim of copyright on such material.
Site infoAletho News
Blog at WordPress.com.