A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

Europe wants to limit speculation in commodities

18 April 2011


A few days before a preparatory meeting for the G20 held on 14 and 15 April in Washington, EU finance ministers met in Godollo Hungary for talks on the economic and financial problems currently faced by the EU. Among the many issues discussed, the Ministers reiterated the urgency to limit speculation in commodities.

To do so, European finance ministers are considering establishing position limits set by the stock market regulator on a maximum number of options contracts to be held by any one operator, as this would reduce the number of "market makers" as defined by Christine Lagarde.

We can see that whilst agricultural commodity prices are experiencing high volatility, more measures for setting up regulatory mechanisms on futures markets are being put forward, be it in the U.S. or in Europe. In December 2010, Michel Barnier, the European Commissioner for Internal Market and Services, did not hesitate in describing speculation on agricultural commodities, as "outrageous"1, and justly so during a conference on the revision of the Markets in Financial Instruments Directive (MiFID). In the United States, the members of the federal agency responsible for the regulation of stock exchanges where commodities are traded, voted in early January for the establishment of "position limits" on 28 raw materials2

However, it must not be forgotten that regulating market speculation in agricultural commodities is a necessity but not sufficient to effectively regulate agricultural markets long-term. Additional measures must be taken in advance on physical markets to improve overall efficiency.

This meeting among EU finance ministers is a good sign of the importance of this issue for the international community, especially as the agricultural G20 to be held in Paris this June, will focus on this theme.

1Please see momagri article from 13/12/10 : http://www.momagri.org/UK/a-look-at-the-news/Michel-Barnier-finds-speculation-on-agricultural-commodities-outrageous-_809.html
2Cf article momagri du 24/01/11 : http://www.momagri.org/UK/a-look-at-the-news/In-the-United-States-regulators-vote-for-position-limits-on-commodity-markets_826.html
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