You can fight if you want to, but I won't.
In the futures markets, there is speculation, but it is simply longs versus shorts. A zero-sum game. For every long speculation, there is a seller or short speculator. It balances out. With food, especially, there is little real international speculation using futures. Few contracts result in delivery, given the number of contracts outstanding.Some producers and some consumers hedge. Some, including farmers, do speculate and gain or lose a lot of money.
All that is largely irrelevant to what is going on in the international markets for corn, rice, wheat, soybeans, and sugar.
Prices are going up because there's not enough food and also because the entire world runs on inflating fiat currencies. Currencies in some poor country depreciate faster than those in richer countries. Also, the percent of income spent for food is much less in wealthier countries so rising prices do not hurt as much.
The net effect of a lot of interlocking causes of supply, demand, and currency valuation, is that people in the very poorest countries cannot buy enough food to stay alive, even if they spend their entire income trying.
But very little of this can be blamed on "speculators" betting on futures back here in the United States. To say that is to be extremely simpleminded, moralistic, ignorant, and unconcerned with the basic problem, which is a shortage of food. |
