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Speculators blamed for rising food prices

A UK anti-poverty campaign group has criticised financial speculators for the recent spike in prices for basic foods, which have reached a two-year high.

The World Development Movement (WDM) said speculation on food by hedge funds, pension funds and investment banks had fuelled the increase in prices of foods such as bread.

During the US summer speculators on the trading floor of the Chicago Exchange bought futures contracts for 1.7 billion bushels of corn – equivalent to around 40 million tonnes. The figure is more than the annual consumption of Brazil; the world’s third largest consumer of corn.

The figure for wheat over the same period was 241 million bushels – equivalent to 6.5 million tonnes.

World prices for wheat rose by more than 40 per cent, while corn rose by more than 30 per cent between April and September 2010.

WDM campaigners said soaring prices were contributing to higher inflation for basics foodstuffs such as bread and pasta in the UK, as well causing hunger in developing countries.

Head of policy at the World Development Movement Julian Oram said: “These figures categorically demonstrate that recent price spikes have been fuelled by opportunistic speculators snapping up food derivatives contracts to make a quick buck.

“This kind of activity is bad news for ordinary people in the UK, whose weekly shop is becoming more expensive during already tight times, and for poor consumers in developing countries, where it’s contributing to hunger and political instability.”

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