Anorak | Unholy nonsense about food speculation at Glencore

Unholy nonsense about food speculation at Glencore

by | 23rd, August 2012

UNHOLY nonsense about food speculation at Glencore. In fact, not just nonsense, but drivel. Glencore has said that as there are droughts and food shortages then this is a good business opportunity for them :

Glencore’s director of agriculture trading, Chris Mahoney, sparked the controversy when he said: “The environment is a good one. High prices, lots of volatility, a lot of dislocation, tightness, a lot of arbitrage opportunities.

“We will be able to provide the world with solutions… and that should also be good for Glencore.

Hmm. So, what’s the reaction to this?

With the US experiencing a rerun of the drought “Dust Bowl” days of the 1930s and Russia suffering a similar food crisis that could see Vladimir Putin’s government banning grain exports, the senior economist of the UN’s Food and Agriculture Organisation, Concepcion Calpe, told The Independent: “Private companies like Glencore are playing a game that will make them enormous profits.”

Ms Calpe said leading international politicians and banks expecting Glencore to back away from trading in potential starvation and hunger in developing nations for “ethical reasons” would be disappointed.

“This won’t happen,” she said. “So now is the time to change the rules and regulations about how Glencore and other multinationals such as ADM and Monsanto operate. They know this and have been lobbying heavily around the world to water down and halt any reform.”

Now, stop and think for a moment. What is it that Glencore actually does? It ships food around the world. Buys wheat in one place, sells it in another Archers Daniel Midland does the same with corn. Louis Dreyfus is the largest rice trader. And so on.

And what would we like to happen when some parts of the world don’t have enough food as a result of drought and

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Posted: 23rd, August 2012 | In: Money Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink