Food prices: UN report calls for Government intervention over rising commodities

6th June 2011

The Guardian's Phillip Inman writes that a UN report is urging for government intervention  "to burst the huge commodities bubble that has developed in the price of basic everyday items such as food staples and oil".

With global investment in commodity funds totalling $270bn prices have rocketed in response to " dysfunctional commodities markets", according to the report.

The UN also "disputes the view of many senior economists and central bankers that commodity prices have jumped as a result of a surge in demand".

"Oil may be as much as 20% over valued while maize, the staple food of many developing world economies, is subject to wild swings in price.

Christian Aid has also urged world leaders to commission a review of commodity markets. It blamed pension funds and other long-term investors for pushing up prices by seeking high returns from investment in commodities' markets.

Recently Oxfam predicted that speculation could put more pressure on food prices which it predicted would food double over the next 20 years.

Oxfam chief executive Barbara Stocking told reporters: "The food system is pretty well bust in the world. All the signs are that the number of people going hungry is going up."

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