Commodities market speculation: The risk to food security and agriculture

Speculation is a major contributor to extreme price volatility. This paper reviews the role of speculation in the global food crisis. It explains the particular role of U.S. regulation of commodities markets within the global regime. Finally, it offers policy recommendations for how governments can better regulate markets in support of food security and employment goals. The report makes a series of recommendations including: creating an independent global commodities exchange regulatory agency, establishing commodity-specific speculative position limits and requiring comprehensive and transparent reporting for all types of futures and options trades executed in the United States.

 IATP - November 2008