German NGO presses EU on grain market regulation
A German non-governmental organisation urged the European Union Monday to regulate speculation in grain futures to help poor people in developing countries.
"The EU should draw the consequences from food crises two years ago ... and submit grain futures markets to more strict regulation," Christoph Bals from the organisation Germanwatch said in a statement.
The group said "unbridled speculation" on grain markets did not provoke but "has considerably accelerated" price increases for commodities like wheat.
"Investors have exploited weak supply stemming from extreme regional climate conditions, which is nontheless not dramatic on a global scale, by buying huge volumes of grain futures and heating up grain markets," the statement said.
"Higher prices mainly affect the poorest in developing countries that devote up to 80 percent of their income on food, compared with 10-20 percent here," Germanwatch director Klemens van de Sand said.
A summer heatwave has decimated Russian grain harvests and fueled price spikes on global markets.
Grain futures allow an investor to lock in delivery at a given point in the future at a given price.
Speculators use futures to sell the grain at that point for a profit.
© 2010 AFP