Speculators Worsening World Food Crisis?
 

Speculators Worsening World Food Crisis?
businessweek.com
April 23, 2008
Beat Balzli and Frank Hornig

http://www.businessweek.com/globalbi...423_366709.htm

Biofuels and droughts can't fully explain the recent shortages�hedge funds and small investors bear some responsibility for global hunger

Not long ago, Dwight Anderson welcomed reporters with open arms. He liked to entertain them with stories from the world of big money. Anderson is a New York hedge fund manager, and as recently as last October he would talk with enthusiasm about his visits to Malaysian palm-oil plantations and Brazilian grain farms. "You could clearly see how supply was getting tight," he said.

In mid-2006 Anderson was touting the "extraordinary profitability" of field crops from corn to soybeans. He was convinced that rising worldwide hunger would be synonymous with highly profitable�and dead-certain�investment bargains.

In search of new investments, Anderson sends dozens of his employees to visit agricultural regions around the world. Back in New York, at his company's headquarters on the 27th floor of an office building high above Park Avenue, they bet on agricultural markets from Peru to Vietnam.............

http://www.businessweek.com/globalbi...423_366709.htm

Re: Speculators Worsening World Food Crisis?
 

Yep,the Suits are a BIG part of the problem,just as they are in the oil prices.Suits make money producing nothing but manipulating markets.By investing YOUR 401K money against your best interests,nice,eh?

Bet there is a lot more manipulation than actual shortage involved in this CURRENT market.

That does not dismiss the facts that the last 6 of 8 years weve consumed more wheat than produced,or that Australia had a 2 year drought,or that the rice harvest is low.To ignore THAT is folly,make your pantry your insurance against all these factors affecting our food.

Re: Speculators Worsening World Food Crisis?
 

Amen


T

Re: Speculators Worsening World Food Crisis?
 

I disagree. They might be bidding the prices of futures up and down, but the speculators aren't growing any crops or taking any deliveries of them, so I see no way they can be causing any shortages.

IMO, what's really happening is the effects of bad grain harvests in Aus combined with the diversion of food to biofuel production, combined with China and India having US dollars with which to buy unlimited amounts of grain.

Re: Speculators Worsening World Food Crisis?
 

From Chris laird, who runs PrudentSquirrel.com:

http://prudentsquirrel.com/


"........It is said there was a lot of wheat planting this year due to super high prices. Wheat futures took a dive, but are still very high. Traders in the Kansas City wheat markets said they have never seen anything like the recent market. What has concerned them is that foreign nations are coming in and buying whatever is available - regardless of price. In one case, as I recall, the US winter wheat crop was spoken for up to 2 years of production. I have not verified that but it's worth pointing out. This all gives us an idea of the panic out there.

Most of the major grain exporters have put various restrictions or freezes on their exports. The US still sells but it is said that the big importing nations are coming to the US and buying any grain they can get. These nations, have gotten rid of grain stocks they used to keep. They are now panicking and buying, price is no object.

We have mentioned before several times in the PS NL that the US and China used to keep from 1 to 3 years of strategic grain supplies. As of a year ago, both of them had sold them off. And, as I mentioned, as it turns out many of the other nations, even poor ones, have sold off their grain stocks too.

So, we enter this present critical grain year needing nothing less than record harvests across the board. I mentioned last week that China has just paid a $400 premium for a huge shipment of potash fertilizer, which normally costs $170 a ton as recently as January. The reason is they know they cannot afford to have a bad harvest this year.

Now that most of the big grain exporters are halting grain exports, the grain market comes under extreme stress. The food importer nations are the ones on the chopping block. They have no option than to pay the now doubled grain prices.

Many of these nations now intend to reacquire strategic grain stocks. What that means is that until world grain stocks are rebuilt, we will be in ongoing grain crises. The world presently has under 50 days of grain stocks. The world used to have something like 6 months or more of stocks.........."