Attack on cereal price speculators

RECENT pre-harvest swings in cereal prices have seen Europe's largest farmer lobby organisation, Copa-Cogeca, allege that the market is not functioning properly and that it is in the hands of commodity speculators.

Expressing concerns about commodity trading that went way beyond the physical market, Paul Temple, chairman of Copa-Cogeca's cereal working party, said this had to be a worry for the supply chain.

"Copa-Cogeca believes that cereal prices were so low in the 2009-10 marketing year - over 50 per cent less than those prevailing in 2007 - that a rise should not have created too much cause for concern. However, the extreme price volatility is worrying and it is a problem for the commodities supply chain, so we need to ensure that markets function better."

Temple added that currently the EU 27 cereals production estimates for this marketing year were expected to be quite stable.

"The current volatility is also heightened by speculation. Cereals producers need a degree of market predictability to develop their businesses, ensuring production fits the growing need for food supply."