WORLD: Food-Commodity Speculation by Banks Caused Hunger, Group Says

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Speculation in agricultural commodities by banks caused hunger during
the 2008 food crisis by amplifying price surges, World Development
Movement said.

Higher food and crude-oil prices reduced real
incomes worldwide, with the greatest effect on the poorest people, the
London-based anti-poverty campaign group said in a report. Speculators
accounted for 65 percent of bets on rising corn prices between 2006 and
2008, according to United Nations Conference on Trade and Development
figures cited in the study.

"The main reason for speculation is to make large
profits for multinational banks," the group said in the report, titled
"The Great Hunger Lottery." "This is one of the most striking examples
of the injustice of profit being put ahead of people."

Riots broke out from Haiti to Egypt in 2008 as
the UN's food-price index rose to a record in June of that year.
Wal-Mart Stores Inc. restricted purchases of some types of rice at its
Sam's Club warehouse unit in April 2008 as prices for the grain climbed
to an all-time high. The food-price gauge has since dropped 24 percent
from its peak.

Regulating commodity markets is "vital" to
tackling hunger, World Development Movement said. The group advocated
trading of derivatives on exchanges with regulated clearing to prevent
default on contracts and "toxic debt sweeping through the financial

"Opposition to regulating commodity derivatives
comes from those in the financial industry with a vested interest in the
profits they make from the unregulated markets, particularly the large
banks," World Development Movement said.

Speculation has made futures markets less
accurate in predicting real prices for commodities, increasing the
difficulty for central banks of forecasting inflation, the
poverty-fighting group said.

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