The banks and our soaring food costs

[LadyBlaBlah]

The rises in inflation and the soaring food costs (which despite reports of 4-5% are more likely around 20% in the last few months) are NOT just to do with global demand. The banks are, yet again, up to no good making money out of speculating now on FOOD commodities

They have simply swapped the speculating they were doing on the sub-prime market, and are now using food to make their money out of nothing.

So when Bob Diamond and those of his ilk say that they deserve their bonuses and enormous profit, maybe they really really don't.

They are forcing up the price of food in their hideous pursuit of making money out of doing nothing and flattering their pathetic ego's without any regard for the people who are struggling to eat. People on here have sometimes said that there is no moral element to banking - can that really be true if they are deliberately screwing up the food commodity markets - because this does have an effect on other human being.

Rant over

some info here

I think the cost of food has risen very fast and very high!I am a bit of a 'sensible' shopper and cook most things from scratch.If careful I can feed dp ds(16) and I plus 2 cats for £50-60 a week.I buy a lot of fresh and some organic and don't eat crap.Since xmas though I have noticed I really can't spend less than £75 ish.

4-5% - where the hell to they get these figures from?

I suppose they ask their butlers, do they?

Gas and electric has soared.

Petrol is a joke.

When will they learn they have no credibility when they treat me like a twat?

Indeed, I know that the largest food manufacturer in the UK has basically put up all their prices by 20% in the last few months - some of their products by 30% - all essential ingredients

It is curious that the media never ever report that the f'ing BANKS have quite a lot to do with these horrific rises.

there is a campaign calling for more regulation on this pathetic food commodity trading here

I think I might pop Georgie a note

oopsadaisy. They are not treating you like a twat but you are behaving like one. Food, petrol, utilities, car insurance have gone up massively. Other things have gone down in price eg electricals. Overall, it averages out to 4% overall. Understand now?

If you want to find out your individual rate of inflation you can do it here

No need for that codinbatter

We all know the measure of inflation is a very very subjective measure, to say the least

They are very 'selective' about what goes in teh basket.Electricals going down is fairly meaningless day to day.A lot of people can't afford a new washing machine/hoover etc atm anyway so a bit pointless

Thank you for your kind words, cod.

I am not in a position to buy electricals because my disposable income is already taken up.

Congratulations to those who have had anything resembling a 4% payrise to cover their lovely new electricals. Hope they are nutritious and heat your home.

Soaring food costs have a lot more to do with the oil price than they have with global demand. Oil prices affect everything from transportation to packaging. Food is traded as a commodity that rises and falls with prevailing market conditions but not all products feature on stock-markets for speculation purposes. It's wrong to blame banks for this one.

It really isn't wrong to blame the banks for this one

The fuel costs are part of it (but then you could look to the banks there too) but the banks are having a MAJOR effect on food prices.
Their totally unregulated speculating is changing the price of foods.

And London is one of the worst in the world for this practice.

info

The lincs cauliflower or pack of Irish steak you might buy at a supermarket today is not traded as a commodity by speculators. But both have travelled significant distances by truck and the production plants are powered by electricity. When diesel & electricity prices are higher that is going to affect the price of those goods far more than banking practices.

The article mentions coffee, wheat, fruit, rice, maize, OJ and cocoa. Those basic raw materials could treble in price and we wouldn't necessarily notice it here because of all the add-on costs before we see those products and also because we don't rely on just one or two foods.

If we could all live on lincolnshire cauliflower alone that argument would make sense.

Are you serious that we wouldn't notice it if wheat, fruit, maize, OJ and cocoa rise?? That is exactly what we are seeing now.

Many, but not all, food manufacturers are speculating themselves and thus the prices are even more volatile for these raw essential ingredients. I cannot see any argument as to why this practice should not be regulated. Except if we all eat plain cauliflower every day.

No cauliflower cheese - flour required.

But we don't live on maize, rice and cocoa etc. We especially don't live on raw sacks of them... as might be the case in the African village cited in the article. If we're eating maize it's likely to be just one cost-component in a finished product.

Cauliflowers was just one example of the vast number of things we can buy in a UK supermarket that aren't commodity traded.. No need to take the piss.

Agree with LadyBlaBlah. But it's not just happening with food, they have been speculating on other commodities as well. It has been going on for a long time, even before the banking crisis.

But, it's not just bankers. What about green policies? What about the sustainability advocates? Food prices are being pushed up due to the deliberate diversion of crops to biofuels. There have been food riots worldwide for years. What do teh sutainability advocates, the green gurus, have to say about it? Nothing. Is it what they really want?

www.guardian.co.uk/environment/2010/jan/22/quarter-us-grain-biofuels-food

On this issue, I agree with Monbiot. He is right when he says

"If the governments promoting biofuels do not reverse their policies, the humanitarian impact will be greater than that of the Iraq war. Millions will be displaced, hundreds of millions more could go hungry. This crime against humanity is a complex one, but that neither lessens nor excuses it. If people starve because of biofuels, Ruth Kelly and her peers will have killed them. Like all such crimes, it is perpetrated by cowards, attacking the weak to avoid confronting the strong."

www.guardian.co.uk/commentisfree/2007/nov/06/comment.biofuels

Yes to the biofuels diversion of essential foods. That is also a factor in cooking oil prices going up by 30% in the last few months.

The whole thing is a disaster waiting to happen, and this time for us not just some remote faraway land.

The other thing is since the last financial crisis the banking sector have become more involved in commodity trading as a way to make their unnecessary profits. It has ramped up considerably and that is partly why we are seeing food prices spiral as they are.

Chil, we don't grow enough food in the uk to support ourselves, that's the problem

LadyBlaBlah - I agree very much with you on the issue of devoting land to growing biofuels. That is especially ridiculous given that growing corn for biofuel is subsidised in the US.

However, the main point in your OP is more complicated than the article suggests.

Food prices have gone up because of the massive amounts of central bank money pumped into the world economy that essentially was put in to save the banking system. It is true some banks are speculating on food prices and their bonuses are grossly offensive but the main problem is the central banks doling out essentially free money to save the banks that has spilled over and driven up gloabl inflation.

I used to be a farmer and then a commodity trader for a living and the act of speculation creates as many winners as losers. Sometimes speculators drive food prices down and no one complans then. As the article says, speculation is an essential process in providing liquid markets for people who need to hedge price exposure.

Unless there is outright price manipulation, bt cornering a market, which is illegal, then pure speculation is not wrong.

What is wrong is providing banks with free capital that is driving global inflation.

www.thisislondon.co.uk/lifestyle/article-23921754-the-men-who-ate-the-world-why-foodstuffs-have-shot-up-in-price.do

Cargill, nor Russian potash billionaires, nor Anthony Ward are banks.

Cargill is a huge industrial farming conglomerate and so is the Russian potash billionaire. Anthony Ward is a private individual risking his on money.

If prices fall, all will lose a very great deal of money. There are as many speculators lose money as make it.

Goldman Sachs made a billion in 2009 - wonder what that was in 2010?

Thanks bb, I don't actually get all of the intricacies of the banking, speculating, hedging industry, as I suspect very few people really do both in the industry and out of the industry. It is hugely complicated and subjective.

The essential underlying problem however is that it is all based on phoney assumptions with dubious motives.

There may well be losers and winners, but there seem to be enough 'winners' to be effecting change.

The guy at unilever is not alone in the big food manufacturers in having massive concern about this in the production of our food.

www.commodities-now.com/news/general/3669-wdm-increased-food-prices-caused-by-speculation-by-banks.html

It's difficult swc - there isn't that much reporting of it yet - as there wasn't about the subprime erm, 'issue'

fex.ennonline.net/34/has.aspx

Good posts LadyBlaBlah. What are Labour doing about it? Have they got a policy on it?