FOOD prices are being pushed up by speculative investment in
global commodity prices, research released this week by the World
Development Movement (WDM) suggests.
The study Dangerous Futures: How our pensions fuel
hunger calculates that UK pension funds totalling £1.5 billion
are being "gambled" on food prices - equivalent to about £180 for
the average UK pension-saver.
The policy and campaigns officer for WDM, Christine Haigh, said
that it was "virtually impossible" to calculate the full effect of
commodity trading on food pricing, because, in the UK, a large
proportion of the price included packaging, transportation,
supermarket lighting and heating, whereas in the developing world
prices were more volatile.
"Our research shows how ordinary people's pensions are being
used without their knowledge to bet on food prices, contributing to
a global hunger crisis," Ms Haigh said. "Legislation to prevent
food speculation driving up food prices is long overdue, but the UK
Government continues to block it."
European Union officials resumed negotiations on the EU's
Markets in Financial Instruments Directive this week. The WDM are
calling for a limit on the level of specul-
ative trading by any institution, similar to a law already
implemented by the United States.
In a statement, a spokeswoman for the Church of England
confirmed that the Church Commissioners and Pensions Fund "invest
in a range of hedge funds, some of which trade in food commodity
"All of these investments have been considered by trustees of
these boards against ethical guidance from the Ethical Investment
Advisory Group (EIAG)."
The EIAG welcomed the WDM's "efforts to raise awareness of the
potential negative impacts of some investment strategies on food
prices", and said that it met WDM officers when it prepared its own
recommendations in this area, which were adopted by the C of E's
national investment bodies in January 2011.
"The EIAG guidance bars investment in strategies which have a
strong likelihood individually or collectively of contributing
significantly to the pricing volatility of basic human necessities
such as food or oil or to have an impact on the fortunes of
individual economies," a C of E statement said. But it defended the
principle of commodity trading: it "can help . . . to correct
mispricings and [by] providing market liquidity".