[lbo-talk] Politics of food

Patrick Bond pbond at mail.ngo.za
Sun Nov 15 00:03:58 PST 2009


Maybe off topic at first blush, but probably not when it comes to the politics of food prices (forwarded from Larry Lohmann in a carbon markets critique listserve):

Steve Suppan on how food prices become vulnerable to the carbon markets when carbon derivatives are bundled into commodity index fund trading:

" ... index funds controlled about a third of all corn futures contracts from 2006–2008", but now, carbon derivatives are expected to be "bundled into commodity index funds. Depending on how traders formulate the mix of commodities in the fund formula, it is likely that carbon emissions could become the dominant 'commodity' in some fund formulas, displacing oil. ... Wall Street forecasts at least a $2 trillion market in carbon derivatives within five years. The current estimated value of all agricultural and non-agricultural commodity derivatives traded under Commodity Futures Trading Commission authority is $4–5 trillion. ... Agricultural commodity prices, and to a lesser extent global food security, could be vulnerable to a swing in carbon derivatives prices, as carbon dominant index funds roll over to take profits."

http://www.iatp.org/iatp/commentaries.cfm?refid=106496



More information about the lbo-talk mailing list