Agricultural ministers at the G20 meeting in Paris agreed to look at mechanisms for regulating excessive speculation on the commodity markets and to provide greater transparency on agricultural production and food stocks. It follows pressure from campaigners, such as Oxfam and the National Farmers' Union, to limit speculation.
"Food commodities are too important to be played about with by day traders and speculators," said NFU Scotland president Nigel Miller. "The unwelcome entry of significant financial resources into the futures markets has brought increased volatility and contributed to price spikes. There is a need for greater structure to be given to the futures markets, so that they do the job intended, which was to allow those in the food supply chain to hedge their risk and plan forward."
Alex Waugh, director of Nabim, said the agreement to provide information on stocks and production could potentially limit speculation. "Where accurate information is freely available, there are fewer opportunities to profit at the expense of the ignorant," he said, although he warned that futures trading should not be criticised per se.
"Someone outside the chain has to provide liquidity to enable futures sales and purchases. It would be wrong to characterise this activity as predatory. If it enables growers to offset some of their risks and have greater certainty about the price they will receive, that is to be welcomed."
At bakery ingredients supplier Macphie, MD Alastair Macphie said that getting agreement on commodity trading regulations would be difficult. "Something needs to be done, but we operate in a world market and getting every country to agree is always a challenge. It's hard enough to agree at a European level, let alone globally."