A REPORT compiled by Unearthed, the investigative unit of the Greenpeace environmentalist organisation, and the independent journalist organisation Lighthouse Reports has thrown a light on the massive profits being made and the role of international speculators in driving world food prices into the stratosphere.
Their findings, reported in the Guardian newspaper on Friday, uncovered the role of the top ten leading hedge funds who made an estimated $1.9 billion (£1.5 billion) out of trading in two main food crops, grain and soya beans, immediately before and after the Russian military action in the Ukraine in February 2022.
Hedge funds are collections of wealthy speculators who scour the world for opportunities, using computer algorithms to work out when prices in commodities will go up. They then pile in using their own billions – or borrowed money – forcing the price of these commodities even higher, so assuring themselves of super-profits.
Olivier De Schutter, co-chair of the International Panel of Experts on Sustainable Food Systems and UN special rapporteur on extreme poverty and human rights, explained: ‘Hedge funds and financial speculators have made obscene profits betting on hunger and exacerbating it. That cannot be right. At the start of the Ukrainian war, financial investors piled into grains and commodities in large numbers, seeking to capitalise on uncertainty and rising food prices, and they hit the jackpot.’
As De Schutter said: ‘These hedge funds have nothing to do with the production, buying and selling of food, they are simply profiteering, but their herd-like behaviour can corner markets, make upward price swings higher, and distort market prices – and this is inflaming price volatility of the food we eat.’
The imperialist war to weaken Russia – with all its sanctions on the transportation of cereals from the world’s largest producer of these commodities – pushed up the price of food around the globe, and this has been exacerbated by these capitalist vultures who thrive on profits made from starving tens of millions of people across the world.
In February, the UN World Food Programme (WFP) reported that 349 million people across 79 countries are ‘acutely food insecure’, as the war on Russia and the price rises driven by the hedge fund speculators have tipped at least 33 million people worldwide into acute hunger.
Acute food poverty is not confined to the poorer nations. In the so-called advanced countries, workers and their families face food prices spiralling out of control.
In the UK, the number of children in food poverty nearly doubled to four million in the last year, with the Food Foundation reporting that one-in-five households (22%) were skipping meals, going hungry or not eating for a whole day in January because they couldn’t afford to put food on the table and pay energy bills or rent at the same time.
The hedge funds and banks make their billions in profits, while the giant oil and gas companies report massive profits out of the energy crisis stoked by the war to weaken Russia – and the working class and masses of the world are expected to pay by having their lives destroyed by poverty and starvation.
The revolutionary implications of this crisis have not been lost on the bourgeoisie. Cindy McCain, head of the World Food Programme, told the Guardian: ‘You can’t tolerate’ speculation when people are starving, adding that ‘food security is a national security problem’.
What is frightening the ruling class is that across the world workers and the masses are not prepared any longer to tolerate a capitalist system that can only make profit through wars and mass starvation.
Capitalism is a broken system worldwide that deserves to perish and be replaced by a world socialist system. Capitalism cannot be reformed, the bankers and hedge fund operators cannot be controlled. The only way forward is to put an end to capitalism through the victory of the world socialist revolution.
This requires the building of revolutionary parties of the International Committee of the Fourth International in every country to lead the fast developing world socialist revolution to victory.