EU delays report into rising food price speculation

25th January 2011, Comments 0 comments

The European Commission has postponed the release of a report into commodities speculation that was heavily criticised by France, citing on Tuesday an absence of evidence.

"We have no doubt there are links between physical and financial markets," said spokesman Olivier Bailly, but he added that "new interactions" between commodities and especially futures financial markets are "more complex."

Bailly said more detailed research was needed to tackle "doubts" about whether sharply rising prices were due to growing demand pressures or imbalances stemming from certain investments, and set a new deadline for release of March 31.

French President Nicolas Sarkozy, who is placing the issue high on his G20 presidency agenda this year, on Monday lambasted a leaked version of the EU report as concluding that speculation played no part in rising prices for commodities, and recommended that the results be published on April 1, April Fools' Day.

Last month EU financial services commissioner, France's Michel Barnier, attacked "scandalous hyper-speculation" on basic food prices, and vowed to impose new "transparency" on the sector.

The European Central Bank added its voice last week to those expressing concerns, citing supply disruptions, adverse weather and "protectionist threats" for a 91 percent rise in 2010 wheat prices.

Maize prices were 57 percent higher at the end of last year, soybeans jumped 33 percent and sugar 32 percent, it added.

Rising food costs have raised fears of a repeat of riots that erupted in 2008.

© 2011 AFP

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