Socialist Worker

Market gambling on food hurts the poor

Issue No. 2211

The rich are getting richer by sending food prices through the roof. A multimillionaire trader, Anthony Ward, was exposed this week as deliberately hoarding tons of raw cocoa to push up the price – and increase the worth of his stock.

Ward bought 241,000 tons of cocoa beans worth £658 million, amounting to 7 percent of global annual production.

Nicknamed “ChocFinger”, Ward is blamed for the highest prices of cocoa since 1977.

Rising chocolate prices may seem relatively unimportant – although fluctuations in prices have huge effects in Africa – but Ward isn’t the only one messing with food prices.

When rice prices were soaring in 2008, many traders began to stockpile rice because they wanted to sell when the price rose higher.

Hoarding goods is a simple way of causing prices to soar. Capitalism has more complex mechanisms too.

Buying up shares in food commodities and betting on their future values wreaked havoc in 2007 and 2008. As economic crisis hit, the rich had shifted their investments to food commodities, which they saw as a safer option than other things.

As this paid off, others raced to put their money into food, causing a vicious circle that pushed prices ever higher.

Speculators eyeing up the soaring prices bet on the prices rising, again pushing them up.

This was all very well for a minority of rich gamblers – but it meant starvation for millions who suddenly couldn’t afford the most basic foods.

The market turns everything into a commodity. Values fluctuate wildly depending on its whims and workings.

A recent World Development Movement report confirms the disastrous impact of gambling and speculation on food prices.

It points out that intense lobbying by the financial industry weakened regulations on commodity speculation.

New, complicated methods for “investing” in food sprung up – and led to the expansion of speculation in food commodity markets.

Food is big business. But those producing it are often left in poverty, while the owners of rich multinationals and bankers make a fortune.

The way that the market has distorted such production and distribution is one of the starkest indictments of capitalism. But it should also be said that this is not a “free” market.

Those at the top have the power to drastically manipulate it for their own ends.

It is billions of ordinary people around the world who pay the price.

It should be no surprise that Ward has links with the Tories. “ChocFinger” gave £50,000 to the Tories and £10,000 to international development secretary Andrew Mitchell before the general election.

Mitchell is now slashing aid to poor countries.

Right wingers blame overpopulation and a lack of food for starvation and hunger. In reality it is the bosses’ drive for profit that leaves people to starve – and the Tories are determined to make it easier for them to do so.


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What We Think
Tue 20 Jul 2010, 18:40 BST
Issue No. 2211
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