Big banks and hedge funds are under fire from anti-poverty campaigners for forcing up the cost of basic foods by speculating on prices. In a new report called The Great Hunger Lottery, the World Development Movement says the institutions which caused the sub-prime mortgage crisis and global financial meltdown have been “secetly gambling” on coffee, cocoa and wheat – and playing havoc with prices. Cocoa prices have soared by 150 per cent in the last 18 months and last month the cost of coffee jumped 20 per cent in three days.
Campaigners are pointing the finger at investment banks such as Goldman Sachs for speculating on food, causing a sudden rise and fall in the prices. WDM believes Goldman Sachs made $1 billion last year in profits by such speculation.
Its director Deborah Doane said: “Investment banks are making huge profits by gambling on the price of every day foods but this is leaving people in the UK out of pocket and the poorest people in the world are starving. The EU should follow the example of America and crack down on banks’ reckless gambling, and the British Government should take the lead in tackling this issue.”
