G20 – difficulties in reaching agreement on regulating futures markets

“It will be very difficult to reach an agreement on the regulation of commodity trading”, Bruno Le Maire, the French Minister for Agriculture, declared in an interview with Reuters in the middle of March, giving his assessment of progress in discussions between the various G20 countries that have started “unofficial” preparatory negotiations a few months ahead of the November summit.

Whilst the fact that G20 countries are close to reaching a consensus on greater transparency in physical markets is something to be welcomed, there is no such consensus in the offing for the key question of the regulation of futures and OTC markets, which is still a source of contention.

As a reminder, France’s proposals include the following: the collecting of data on OTC markets, the introduction of futures position limits, the introduction of daily limits on price moves to curb their volatility, and provisions for high volume and frequency trading.1

These measures are already in place in Brazil and the USA, and are based on those put forward by the EU for financial markets. They are absolutely essential if we wish to be able to effectively regulate agricultural markets. It is to be hoped that Bruno Le Maire will manage to clinch an agreement during the meeting of G20 Agricultural Ministers scheduled for 22 and 23 June.