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Profiting off hunger: Wall Street makes big gains over food price spikes

AFP Photo / Tony Karuba

AFP Photo / Tony Karuba

Powerful firms like Goldman Sachs have made hundreds of millions of dollars in food future trades. Critics accuse them of profiting off starvation and market manipulation, while traders claim their profits are due to increasing consumption in China.

­World food prices tracked by the UN Food and Agriculture Organization (FAO) have more than doubled in the past 10 years. The FAO’s Food Price Index, which baskets prices for five prime food commodities, peaked in 2008 and 2011, each time rising more than 50 percent from the previous year. The latest price spike was one of the key factors that triggered the series of uprisings in the Arab world resulting in the fall of several governments.

The year 2013 may see another price hike, following the worst draught in the US in 50 years and poor harvests in Russia and Ukraine. The UN has warned that the world may be approaching a major hunger crisis.

At the same time, the industry is bringing millions in profits to those who rushed to invest in food. Goldman Sachs made an estimated $400 million in 2012 from investing its clients' money in a range of "soft commodities," from wheat and maize to coffee and sugar, according to an analysis by the World Development Movement (WDM).

"While nearly a billion people go hungry, Goldman Sachs bankers are feeding their own bonuses by betting on the price of food. Financial speculation is fueling food price spikes and Goldman Sachs is the No, 1 culprit,"
Christine Haigh of the WDM told the British newspaper The Independent.

 

MORE

http://rt.com/news/food-price-speculation-banks-411/


Comment by Less Prone on January 22, 2013 at 9:05am

In parallel with food scarcity the governments are limiting productive use of your gardens when it should be just opposite.

Comment by Less Prone on January 22, 2013 at 11:28am

Times have changed. These booklet show the stark contrast in society now and a hundred years ago.

http://www.biodiversitylibrary.org/creator/27160

  1. Victory gardens feed the hungry : the needs of peace demand the increased production of food in America's victory gardens / by Charles Lathrop Pack.
    By: Pack, Charles Lathrop, - Pack, Charles Lathrop, - National war garden commission.
    Publication info: [Washington] :National War Garden Commission,c1919.
    Contributed by: Library of Congress (archive.org)
    View book
  2. The war garden guyed ...
    By: National war garden commission.
    Publication info: Washington, D.C.,The National war garden commission,1918.
    Contributed by: Library of Congress (archive.org)
    View book
  3. War gardening and home storage of vegetables.
    By: National war garden commission. - National war garden commission.
    Edition: Victory ed. 1919.
    Publication info: Washington, D.C. :National War Garden Commission,c1919.
    Contributed by: Library of Congress (archive.org)
    View book
  4. War vegetable gardening and the home storage of vegetables ...
    By: National war garden commission.
    Publication info: Washington, D.C.,National War Garden Commission,1918.
    Contributed by: Library of Congress (archive.org)
    View book

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