Food Prices - speculation and hoarding

Jomo Kwame Sundaram , United Nations Assistant Secretary-General for Economic Development writes :-

"Lack of food is rarely the reason that people go hungry. The world today produces enough food to feed everyone. The problem is that more and more people simply cannot afford to buy the food they need. Even before the recent food-price increases, a billion people were suffering from chronic hunger, while another two billion were experiencing malnutrition, bringing the total number of food-insecure people to around three billion, or almost half the world’s population.

Global food prices are at the highest level since the United Nations Food and Agriculture Organization started monitoring them in 1990. The World Bank estimates that recent food-price increases have driven an additional 44 million people in developing countries into poverty. The rapid rise in world prices for all basic food crops – corn, wheat, soybeans, and rice – along with other foods like cooking oils, has been devastating for poor households all over the world. But almost everybody’s standard of living has been reduced. Middle-class [-income] people are increasingly careful about their food purchases; the near-poor are losing headway and falling below, rather than staying above, the poverty line; and the poor and vulnerable, not surprisingly, are suffering even more...

....Speculation and hoarding have also been contributing to food-price spikes. More securitization, easier online trading, and other financial-market developments in recent years have facilitated greater speculative investments, especially in commodity futures and options markets. As the financial crisis deepened and spread from late 2007, speculators began investing in commodities, and the dollar’s decline relative to other currencies has also induced such investments. Indeed, this may explain recent food-price surges better than the factors underlying longer-term gradual upward price trends. In that case, the problem that many people around the world are facing today is one of food security, not a lack of food. Of course, if you are hungry or undernourished today as a result of food-price increases, that is a distinction without a difference."