News last update:6 Aug 2012

“EU must tighten agriculture derivatives rules”

The European Union must tighten its regulation of agriculture market derivatives, arguing financial speculation is having an impact on physical commodity markets, European commissioners said in a statement.

Michel Barnier, the commissioner in charge of markets regulation, said agricultural price volatility is mainly caused by changes in supply and demand, but "agricultural products are turning into financial assets, which is why we want to share with you our concern about this."
Financial firms can have a major influence on physical commodity markets, Dacian Ciolos, the European Union's agriculture chief also said.
"The fact is, these investment funds have a lot of clout," said Ciolos, who added that an international forum is needed to discuss issues related to the supply of commodities, because decisions from single governments, such as export restrictions, can have an impact on the global supply of an agricultural commodity.
Already in September 2010 France called for a tightening of the oversight on commodity derivatives markets in the European Union in order to help reduce the volatility of commodity prices.

Dick Ziggers

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