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EU votes to control speculation on food prices

25 April 2014

SHUTTERSTOCK

NEW LIMITS on speculating on food prices have been agreed by the European Parliament.

On Tuesday of last week, MEPs voted to enable authorities to limit the size of the financial risk that a firm can have in relation to certain commodities. The statement from the Parliament cited the desire to "support orderly pricing and prevent market-distorting positions and market abuse".

The head of Oxfam's EU office, Natalia Alonso, welcomed the move to "stop the scandal of banks and other speculators making a profit by betting on food prices. . . Food is a right, not something bankers can recklessly gamble on."

The director of the World Development Movement, Nick Dearden, said: "Public anger over banks' speculating on food has been enormous, and the European Parliament has recognised this concern by backing the new controls."

On Wednesday, the editor of the magazine Energy Risk, Mike Pengelley, observed that there was a "very vigorous academic debate over whether or not speculation causes price volatilty. . . There is a lot of academic evidence that points in both directions."

On Tuesday, a Christian Aid spokeswoman said that the charity would "like to see a full impact assessment before any further significant regulatory changes".

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