Even before the doors opened at G20 in Toronto on the weekend of 26 and 27 June, the FAO once again expressed concerns about the financialisation of the agricultural commodities market, a process that for many experts is linked to the food crisis of 2008.
In a press release issued on 23 June, the UN agency confirmed that "the surge in global food prices two years ago may have been exacerbated by speculation in organised futures markets”. A harsh comment, which explains the FAO’s current position in favour of market regulation.
But the debate continues: whilst some are calling for the abolition of markets, others believe instead, that excessive regulation was the cause of the financial crisis two years ago. The FAO advise caution: "The restriction - or ban - on speculative trading would do more harm than good," they say, adding: "If futures speculation seems to have affected prices short term, efforts to reduce speculation could have consequences in the longer term”. The possibility of investor flight and the reduction of liquidities in these markets are in fact the likely outcome of a regulation on the futures markets.
The FAO, moderated, is therefore clearly positioned in favour of regulation: the agricultural futures markets are of course essential but must be regulated to avoid massive and uncontrolled speculation as observed in 2008.
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