Letter: Speculation fuels food price rises
11 April 2008
'The Guardian' Over the past decade we have seen asset bubbles burst in the dotcom industry, developing country stock markets (the latest is China) and now a colossal housing bubble in the US and Europe (Credit crunch, April 10).
The victims have largely been the middle and working classes of the wealthier west. But the new victims of the unregulated flows of international capital will be the poorest households on earth.
Amartya Sen taught us that reduced purchasing power rather than a lack of food availability causes hunger and malnutrition. The recent terrifying increases in food prices (Report, April 9) means the poorest households in the developing world, surviving on tiny fixed incomes, will be hungry right now.
In a few months our TV screens will show the pot-bellies of children with kwashiorkor and the emaciated faces of mothers and children ravaged by malnutrition and infection. Many will die unnoticed.
Food price rises cannot simply be explained by crop yields or the expansion of the use of agricultural land for biofuels. Speculation in agricultural commodity markets runs in parallel with the rising costs of gold, oil and essential metals.
Gordon Brown is right to call for concerted action by the G8. Food commodities should be insulated from speculators and hedge funds who profit as prices rise, and again when they fall in a few months time.
Anyone profiting from this volatility will do so at the expense of the lives of thousands of mothers and children.
Director, UCL Institute for Global Health