Be aware that chocolate inflation is about to hit home.
Speculation is now so rife that a group of European cocoa trading companies have taken the rare step of making public a complaint about the extent of the speculation on the London cocoa market and demanding tighter regulations. In a letter, leading cocoa industry figures claim there is clear “manipulation… which is bringing the London market into disrepute”. They accuse the market of lacking “transparency and control”. They warn that unless action is taken to stop “big players from cornering the market” they will quit London. Fair-trade activists and anti-poverty pressure groups are calling for government action to curb financial speculators from inflating food prices. They warn that unless urgent moves are taken to clamp down on the hedge funds and other financial groups behind the speculation there could be shortages, death through starvation and outbreaks of civil unrest in poorer countries.
Critics claim that financial speculation in food commodities has caused hundreds of thousands of deaths through malnutrition. A steep rise in prices for staple foods between 2006 and 2008, including rice, which rose 217 per cent, and wheat, which increased by 136 per cent, resulted in a global food crisis and riots in Haiti, Bangladesh and Egypt. Oxfam said an extra 119 million people were pushed into hunger. The London cocoa market operator, Liffe, said it was aware of concerns about the market and was ensuring an orderly market by carrying out “normal regulatory activities”. Liffe said it would be discussing critics’ concerns with them privately.