Written question asked by Ian Murray (Labour) on Monday, 12 September 2011, in the House of Commons. It was due for an answer on Wednesday, 14 September 2011. It was answered by James Paice (Conservative) on Monday, 3 October 2011 on behalf of the Department for Environment, Food and Rural Affairs.

Food

Question: To ask the Secretary of State for Environment, Food and Rural Affairs what recent assessment she has made of the effect of financial speculation in commodity derivative markets on food security; and if she will make a statement.

Answer: Following the 2007-08 Agricultural Price Spike, the then Government conducted a review to analyse potential causes of price spikes, including the role of financial speculation. This review of the various potential mechanisms, whereby speculation may distort markets, found no evidence of speculation having a significant role in increasing the volatility of food prices. With factors including export restrictions, stock levels, global energy prices and damaged harvests, being the immediate causes of price spikes. The review also identifies the potential benefits of speculation to agricultural markets.The Government agree with the findings of the review.

Secondary information