I thought that this was an interesting little snippet of news:
World food prices fell in January to a 19-month low, as costs for everything from sugar to grains slid amid ample global supplies, the United Nations’ Food & Agriculture Organization said. An index of 55 food items dropped to 203.4 points last month from 206.2 in December, the Rome-based FAO wrote in an online report today. The index is down 4.5 percent from a year earlier and is at the lowest level since June 2012.
This is excellent news of course for it means that we're all richer. However, it does rather beat up one of the myths that those on the left have been promulgating over recent years. Here's the absurd grotesques over at the World Development Movement on the subject:
Banks are earning huge profits from betting on food prices in unregulated financial markets. This creates instability and pushes up global food prices, leaving millions going hungry and facing deeper poverty. In January 2014, after four years of our campaign, the EU agreed to introduce new rules to prevent hedge funds and investment banks from driving up food prices.
Do note that those new rules aren't actually in effect yet, let alone resonsible for the falls in food prices.
The WDM's basic claim was that the more speculation there is in futures markets then the higher prices will go. As anyone with any knowledge at all of markets has pointed out, futures markets can only affect spot prices if stocks are rising. When food prices were indeed rising we did see an increase in futures speculation, indeed we did. However, we did not see an increase in stocks: therefore it cannot have been the futures pricing that was driving the spot prices.
We've also not seen a fall in the amount of money being used to speculate in food prices: nor a reduction in the number of trades. But we are indeed seeing food prices fall.
At the end of which there's really nothing left of the case that financial speculation in futures markets increases spot food prices, is there?
No doubt they'll think up some other phantastical claim soon enough though.