Barclays ends food speculation

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Barclays ends food speculation

Barclays made around £278 million from speculating on food in 2012. But they announced an end to this business on Tuesday 12 February. The bank’s total earnings from food speculation from 2010 to 2012 was around three quarters of a billion pounds.

Campaigners are happy with the end of speculative deals with hedge funds. But they are disappointed by Barclays’ decision to continue selling investment products that allow other financial businesses, like pension funds, to speculate on food.

The World Development Movement published the figure of £278 million ($431.4 million). They want regulation to stop banks betting on food prices – this contributes to the global hunger crisis.

Barclays has been the most important British bank speculating on food. Goldman Sachs is the world leader.

In 2012, several German, Austrian and Scandinavian banks said that they would reduce or stop trading in food commodity markets. But German Deutsche Bank, one of the banks that said they would stop, has started speculating on food again.

New laws to stop speculation are being planned in the EU, but the British government has not agreed to any controls yet.

World Development Movement campaigner Christine Haigh said: ‘Barclays’ announcement is a good first step. One of the world’s biggest banks has agreed that gambling on food is not an acceptable way to make money, and other speculators like Goldman Sachs should pay attention. But Barclays is still selling investment products which allow others to speculate on food prices. And they could return to larger scale speculation at any time. The only thing that will prevent banks forcing up prices is strict regulation, and this is what the UK government should be supporting.’

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