Regulating excessive speculation: commodity derivatives and the global food crisis

Chadwick, A. (2017) Regulating excessive speculation: commodity derivatives and the global food crisis. International and Comparative Law Quarterly, 66(3), pp. 625-655. (doi: 10.1017/S0020589317000136)

Abstract

Evidence suggests that commodity derivatives speculation contributed to extraordinary patterns of grain price volatility that led to a global food crisis in 2007–11. People in countries throughout the world are increasingly dependent on international commodity markets for access to food. Almost everywhere, now, the value of food is determined by a single condensed symbol of its worth—its price. Persuaded of the need to ensure that this measure of value is not put at risk of distortion in the pursuit of financial profit, governments in the US and in the EU are now implementing new regulations designed to curb ‘excessive’ levels of speculation in derivative markets. Carrying out an analysis of these regulatory measures, the article demonstrates that both sets of reforms suffer from a critical limitation: They are predicated on an inaccurate understanding of how activity in commodity derivative markets can impact on underlying food prices. If the new regulations for commodity derivative markets are not up to the task, as this article argues that they are not, a more fundamental revision of global economic structures may be required if the basic needs of human beings are not to be subsumed to the interests of financial capital in the years to come.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Chadwick, Dr Anna
• Authors: Chadwick, A.
• College/School: College of Social Sciences > School of Law
• Journal Name: International and Comparative Law Quarterly
• Publisher: Cambridge University Press
• ISSN: 0020-5893
• ISSN (Online): 1471-6895
• Published Online: 26 April 2017
• Copyright Holders: Copyright © 2017 British Institute of International and Comparative Law
• First Published: First published in International and Comparative Law Quarterly 66(3):625-655
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher