New York (HedgeCo.net) – Anti-poverty campaigners are up in arms against financial speculators for making bets on food prices, The Guardian reports. Cocoa prices jumped to a 33-year high when a London hedge fund bought about 7% of the annual global production of beans.
Over the past 18 months, a 150% rise in cocoa prices have forced many chocolatiers to raise prices and use less cocoa, the Guardian said. These rising costs are threatening the livelihoods of farmers in developing countries, the campaginers claim.
“The World Development Movement (WDM) is issuing a report on the role of hedge funds in the commodities markets in recent years, during which time cocoa prices have more than doubled, energy prices have soared and coffee has fluctuated dramatically.” the paper said.
The anti-poverty campaigners estimated that Goldman Sachs made a profit of $1 billion through speculating on food last year. The bank says the “overwhelming majority” of its activities in commodity markets are on behalf of clients and that the WDM’s profit estimates are “ludicrously overstated”, according to the Guardian.
Goldman Sachs also dismissed the WDM report as “horribly misinformed on a number of fronts”.
Alex Akesson
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