Speculation and world food markets

As food prices continue to rise, some observers have pointed a finger at speculation as a culprit in the price run-up. What role is speculation playing in the current food crisis and how can markets be calmed?

This document looks at the role of speculation in food markets. Although market fundamentals explain the flare in food product prices, it is important also to consider how speculation influences investment decisions and helps increase price volatility.

 IFPRI - July 2008