Food speculation
Food speculation is betting on food prices financial markets. Food speculation by global players like banks, hedge funds or pension funds is alleged to cause price swings in staple foods such as wheat, maize and soy - even though too large price swings in an idealized economy are theoretically ruled out: Adam Smith in 1776 reasoned that the only way to make money from commodities trading is by buying low and selling high, which has the effect of smoothing out price swings and mitigating shortages.. For the actors, the apparently random swings are predictable, which means potential huge profits. For the global poor, food speculation and resulting price peaks may result in increased poverty or even famine.
In contrast to food hoarding, speculation does not mean that real food shortages or scarcity need to be evoked, the price changes are only due to trading activity.
The 2007–08 world food price crisis is thought to have been be partially caused by speculation.
