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Price speculation impacting food supplies

The Guardian has a story in which head of the International Food Policy Research Institute (IFPRI), Joachim von Braun, says tighter regulation is needed to ensure speculators don’t cause an artificial demand in global food markets.

He says if regulation is not tightened, prices would increase excessively and the risk of malnutrition would increase.

He was one of the first to predict the sharp rise in food prices, which has seen protests in Italy, Mexico and India, as well as the number of starving people rise from about 800 million to more than 1 billion:

The world food market is still “seriously exposed” to speculators artificially driving up prices and worsening the risks of malnutrition, according to one of the world’s leading agricultural researchers.

Linking the recent food and financial crises, Joachim von Braun, the head of the International Food Policy Research Institute (IFPRI), warned that the world was at risk of a new panic over grain unless commodity markets were more tightly regulated and production expanded.

“The banking sector is in the process of being re-regulated worldwide, but the food market remains seriously exposed to short-term flows of indexed funds into commodity exchanges. That vulnerability needs to be addressed,” he said in an interview with the Guardian. READ MORE.