THE FINANCIAL speculators and hedge funds that so spectacularly contributed to the financial crisis resulting in the ’Great Recession’ have now turned their attention to the international food market with devastating consequences.
These spivs are now trading heavily in the futures markets in food, speculating on prices and causing extreme volatility.
The UN Food and Agricultural Organisation reported: "Rarely have markets exhibited this level of uncertainty and sudden turns in such a brief period of time. World cereal production this year, which is currently put at 2,216 million tonnes, is 2% below 2009 levels, 63 million tonnes less than the forecast reported in June."
The UN has warned that food prices could rise by 10-20% next year after poor harvests and an expected rundown of global reserves. More than 70 African and Asian countries will be the worst hit.
Combined with the heatwave and fires in Russia and the floods in Pakistan, this has resulted in the prices of wheat, maize and many other foods traded internationally rising by up to 40% in just a few months.
Sugar, butter and cassava prices are at 30-year highs, and meat and fish are both significantly more expensive than last year.
Larry Elliot in the Guardian has argued that these massive increases are also due to speculators buying up farms in poor countries to profit from China’s increasing reliance on imported food. This in turn increases poor countries’ reliance on expensive imported food.
International food import bills could pass the $1 trillion mark and the speculators cannot resist getting their noses into a trough that size.
The 2007/08 food crisis saw food riots in more than 25 countries and 100 million extra hungry people. The UN fears similar for next year.
As Lester Brown, founder of the Washington-based Worldwatch Institute, pointed out: "The poorest will suffer the most because they feel the effect of price rises directly".
With one and a half billion people globally struggling to get by on between $1 and $2 a day, capitalism has nothing to offer them – not even enough food in their bellies.
But while the world’s poorest people are suffering, big business is enjoying a profits bonanza in global agriculture and its associated trade. In the advanced capitalist countries working people are also increasingly struggling with rising food prices.
Socialist nationalisation of the agribusiness multinationals and a democratically run, international plan of food production represents the only way forward for the poor and the working people of the world.