Thursday, August 23, 2012

Hunger - more in it for Glenmore

 The world's largest commodities trading company, Glencore, after it described the current global food crisis and soaring world prices as a "good" business opportunity. The USA experiencing a re-run of the drought "Dust Bowl" days of the 1930s and Russia is suffering a similar food crisis. The G20 is considering holding an emergency summit on the world food crisis.

Glencore's director of agriculture trading, Chris Mahoney, said: "“The US weather starting mid-May...has been among the worst three or four years of the century, comparable to the dust bowl years of the mid-30’s, In terms of the outlook for the balance of the year the environment is a good one. High prices, lots of volatility, a lot of dislocation, tightness, a lot of arbitrage opportunities. [the sale and purchase of an asset to profit from price differences in different markets] "

 His boss, the Glencore chief executive Ivan Glasenberg, described the current volatility of the food market as “a time when industry fundamentals are the most positive they have been for some time.”

Concepcion Calpe, the senior economist of the UN's Food and Agriculture Organisation,  explained that  "Private companies like Glencore are playing a game that will make them enormous profits." Ms Calpe said leading international politicians and banks expecting Glencore to back away from trading in potential starvation and hunger in developing nations for "ethical reasons" would be disappointed. "This won't happen," she said. "So now is the time to change the rules and regulations about how Glencore and other multinationals such as ADM and Monsanto operate. They know this and have been lobbying heavily around the world to water down and halt any reform."

 Jose Graziano da Silva, the director-general of the UN’s Food and Agricultural Organisation (FAO), has blamed food price volatility on “excessive speculation in derivative markets, which can increase price swings and their speed” while Argentina’s President Fernandez warned that “financial speculation is exacerbating market fluctuations and this exacerbation is generating uncertainty.”

 Bankers from institutions such as Barclays, Goldman Sachs and Morgan Stanley have collectively channelled $200bn of investment cash into agricultural commodities in the past decade.

Oxfam's Jodie Thorpe, said: "Glencore's comment that 'high prices and lots of volatility and dislocation' was 'good' gives us a rare glimpse into the little-known world of companies that dominate the global food system." Oxfam said companies like Glencore were "profiting from the misery and suffering of poor people who are worst hit by high and volatile food prices", adding: "If we are going to fix the ailing food system then traders must be part of the cure."

The World Socialist Movement and this blog are neither surprised nor disappointed by the normal behaviour of capitalist companies who are constantly in search for profits even if at the expense of the poor and the vulnerable. We have over the years highlighted the culpability of capitalism in causing hunger and starvation. The solution will not be in expecting the leopard to change its spots but a fundamental transformation of the current food production into one that provides for peoples' needs and not for a few's profi.

Meantime while hundreds of millions of people suffer globally from chronic hunger Americans throw away as much as 40 percent of their annual food purchases, equivalent to at least $165 billion worth of produce and meat, a study released by Natural Resources Defense Council (NRDC), says. US government figures indicate that supermarkets in the country lose $15 billion each year in unsold fruits and vegetables alone. Food makes up the largest content of solid waste in US landfills.

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