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Outlook: Betting on food prices leaves a nasty taste in the mouth

 

James Moore
Monday 02 December 2013 20:00 EST
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Outlook Traders speculating on food prices is not illegal but it is immoral. Yesterday the World Development Movement produced a report which claims as much as £1.5bn is being bet on food prices by UK pension funds.

That equates to £180 of the average UK pension saver's cash being gambled, usually on those prices rising. Interestingly, pension trustees might not actually realise this. The translation for "rising food prices" in the City is "a balanced exposure to the commodities markets for the purposes of actualising long-term gain".

Similar verbal diarrhoea can readily be deployed by silver-tongued salespeople employed by investment banks, who usually turn up armed with lots of pretty graphs on power-point presentations.

What those will show is that the potential of this market can only increase as the world's population rises and food production fails to keep up with it.

But there is nothing pretty about starvation and that is what rising food prices mean in those parts of the world where earning a dollar a day is considered a small victory.

That £180 is not a huge number, but it's likely to rise. Most people would, however, baulk if even a small part of their comfortable retirement was derived from someone else starving.

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