The leading expert on food at the United Nations says sharp price fluctuations in the price of food has little to do with actual supply. Nowadays, rapacious out-of-control investment backs such as Goldman Sachs, Morgan Stanley and Barclays Capital now dominate food speculation through the commodities markets. They dwarf the amount traded by actual food producers and buyers needlessly tipping millions into hunger and poverty.
The United Nations Food and Agriculture Organisation currently estimates that about 795 million people of the 7.3 billion people in the world, or one in nine, are suffering from chronic undernourishment in the period 2014-2016. We are not talking of poverty here but life threatening food shortages driven by the pursuers of profit.
About one in eight people, or 13.5 percent of the overall population, remain chronically undernourished in developing regions. As the most populous region in the world, Asia is now home to two out of three of the world’s undernourished people.
By 2014, food speculation by banks and hedge funds had risen to $126bn, a figure that has doubled from 2008. From 2000 to 2015 global food prices rose a staggering 94 percent and although they have been falling consistently over the last year, prices are still only 14 percent lower than all-time highs.
To give some perspective, speculative investment in agricultural commodities five years ago was 20 times the amount spent by all countries on agricultural aid and Goldman Sachs, for instance, earned $600 million from it. It was George Bush who deregulated this market with the Commodities Futures Modernization Act in 2000. Hence the astronomic price rises that followed and it is now estimated that 115 million people has suffered as a direct result.