Financialisation and Financial Actors in Agriculture Commodity Markets

Financing Food focuses on how derivative markets work and on speculation in food and agricultural products. This study demonstrates how the futures market for agricultural products, in particular, has changed and is being disrupted by new speculators, growing index funds and commodities funds. This can have an influence on food prices, which can rise as a result, making food too expensive for the poor inhabitants of developing countries. The study also shows how a number of large banks and investment banks, such as Goldman Sachs, Bank of America and Deutsche Bank, control a wide range of functions in the derivatives trade and are a driving force behind the financial speculation. These banks made huge profits and paid huge bonuses in 2009, partly as a result of the trade in derivatives, of which food derivatives formed a part. SOMO closes the report with several proposals for reforms within the financial markets for agricultural products, in order to prevent excessive speculation. Up to now, the derivatives trade has remained largely unregulated. Legislation is being drawn up in the US, the subject has long been on the agenda for the G-20, and the EU is preparing new laws.

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