Wednesday, August 3, 2011

For those who still doubt the role of corporations in raising food prices through speculations

"Reports that a company owned by Cargill and ABF bought all the available UK feed wheat last month has renewed calls for tighter regulation of commodity markets.

Traders reportedly told the Bureau of Investigative Journalism that Frontier Agriculture bought all available May Futures contracts on the London International Financial Futures and Options Exchange (Liffe) in the period running up to the tender date in the last week of April.

It has been described as an “unprecedented move” and an attempt to manipulate the market, which Frontier denies.

However, the BIJ says that Frontier is believed to have taken delivery of about 225,000 tonnes of feed wheat now worth about £40m."

1 comment:

Anonymous said...

The notion that you could "buy all available May futures contracts" is misleading. Perhaps they went long, or short, with as many counterparts as were willing, meaning that they wanted to enter into more contracts than were available counterparties. Unlikely, but possible, I suppose.