ALEX EVANS, professor at the University of New York, collaborations opens Millions of 3,500 talking about the private responsibility in the public calamity of food prices. One issue that confirms our report a few days ago, and the like, as it affects these days to Barclays Bank.
Finally, activists have found the villain they were looking into the matter of speculation and food prices. Seeing them line up and prepare for battle may remind some of the air cavalry scene in Apocalypse Now. Throughout the rollercoaster that have become food prices in recent years, one of the most contentious issues was the role of financial speculators in the rise in prices or in generating higher levels of volatility. Some politicians (especially the French, and if you do not see the agenda of the G20 this year) have seized the fleeting opportunity to paint the financial sectors as the bad guy. Campaign groups such as the World Development Movement have also been aupado this thesis. Unfortunately, the truth is that most of the evidence is far from conclusive. Homi Kharas, the Brookings Institute, puts it this way:
"Almost all serious studies reach the same conclusion: the volatility inherent in speculation causes food markets, not vice versa."
Similarly, when the International Food Policy Research Institute examined the subject, his conclusions were not clear-cut: as far as you arrived is to say that speculative activities "could have had an influence" in raising prices. The broad consensus among independent analysts is that financial speculation may have added some "foam" on the market, and possibly result in additional volatility in the margins, but it is far from being the main cause of price inflation food or volatility.
Are you an NGO, this news is disappointing, because speculators and intermediaries Financial statements are a great villain for a campaign. But now he has appeared an interesting development.
In recent weeks, the commodities trading firm Glencore, based in Switzerland, has been preparing for an IPO through a public offering. While it is likely that you have not ever heard of this company (has some allergy to advertising), it is one of the great players in this market. With revenues last year amounted to 145,000 million dollars and expected stock of 73,000 capitalación billion after the stock offering, Glencore will become more public offering important that has seen the London Stock Exchange, and upon completion will make it one of the largest companies in the FTSE 100 [index of the London Stock Exchange].
a couple of weeks ago, UBS revealed Glencore, one of the banks guaranteeing the issuance of shares, which had made a monumental speculative bets on rising prices of wheat and maize during the early stages of drought Russian last summer (which in many ways, was the starting signal for the current upsurge in prices after the financial crisis). What then? This is the key point, as expressed by the Financial Times in its edition of April 25:
"While bet rising prices, trade 'senior' in the Swiss-based company publicly urged Russia to impose a ban on grain exports. Moscow reacted within days, triggering a 'race of grain'. "
If this is true, then the story is completely different. Because there may be doubts about the effect of speculation on inflation or price spikes, but no one has any doubt about the harmful result of export restrictions. At the height of the escalation of 2008, the vetoes of exports was the main general discomfort became simple panic, sending prices to record highs in a vicious circle. And the Russian veto on exports last summer ignited the fuse of a new escalation of prices, which have reached new records and have trampled on the way to about one billion people worldwide.
Then you are guilty? This is the key paragraph of a story published by Glencore on 3 August: "In our opinion, the government [Russia] has every reason to stop all exports."
Is this "urge", as suggested by the FT? I do not think that is an unreasonable charge. Glencore is a major player in commodities markets. Their analysis are heard and used as a basis for move in the markets, even by governments. And the fact that until now have not made public its long-term position on wheat at that time is suspect at best. At worst it looks like a direct manipulation of the markets that bill is paid by the world's hungry. Glencore is now saying that the note was only the personal views of its author, not a formal position of the company. Also argues that vetoes Russian exports "not particularly helpful to your business", as the grain they had bought was stalled by the embargo, forcing them to buy grain elsewhere, at higher prices, to meet their obligations.
But it is unlikely that arguments like these weigh much against the activists (and note that the response of Glencore does not say that in fact losing money). And with Glencore about to get under the spotlight because of its gone public, and speculation and export restriction on the agenda of the G20 in 2011, it is hard to believe that there is little opportunity to campaign ...
[This entry was originally published in the blog of Alex Evans, Global Dashboard.]
source: Blogs The Country
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Switzerland's Glencore speculated the price of wheat and pressured Moscow to suspend exports
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