Yes, and it’s Deborah Doane of the World Development Movement behind it again.
Deborah Doane, director of anti-poverty campaign group World Development Movement, which has been a vocal critic of what it describes as opaque commodity markets, said: “The end result of trades like this is a volatile market that often has no connection to real supply and demand, wreaking havoc on consumers in the UK and in poor nations.
“The UK Government has turned a blind eye and has aimed to block European proposals for regulating commodity markets that would bring this type of profiteering to a halt even though the light touch approach to regulation has been shown to be a complete failure.”
So what’s she being stupid about this time?
Traders told the Bureau of Investigative Journalism that Frontier bought all available May Futures contracts on the London International Financial Futures and Options Exchange (Liffe) in the period running up to the tender date in the last week of April. Feed wheat sets the benchmark price for wheat used in food.
In recent weeks, Frontier is believed to have taken physical delivery of approximately 225,000 tonnes of feed wheat now worth in the region of £40m in what has been described as an attempt to corner the market.
Frontier strongly rejected any suggestion of an attempt to manipulate the market. It did not confirm or deny it made the unusually large trades and refused to reveal its position. The company’s trading director, Jon Duffy, stated that all the wheat contracts it took physical delivery for were made to secure enough grain to fulfil customers’ orders.
“We are not speculators, said Duffy. “We are physical grain traders. We buy about 5m tonnes of grain. We buy it, move it, transport it and deliver it.”
So, they used futures to secure physical delivery for their customers.
This would no more move the price than buying the same amount in the physical market would move the price. Less possibly, as the futures market is more liquid than the physical.
This is, umm, real supply meeting real demand and almost certainly in a manner which reduced price volatility.
So, she’s wrong, as usual.
In fact, she’s worse than wrong. Note this:
the temporary closure of a major bio-ethanol facility on Teeside, which uses almost 100,000 tonnes of wheat each month,
So that’s one bio-fuel plant alone uising 1.2 million tonnes a year. What’s the size of the UK wheat crop?
The UK currently produces around 15 million tonnes of wheat each year
So, that’s 8% of the entire wheat crop* going into one single biofuel plant alone. You might think that would wreak havoc on consumers in the UK and in poor countries, no? Laws that insist that we should quite literally put the staff of life, our daily bread, into cars not people?
But Ms. Doane would rather complain about the dealings in offices she doesn’t understand rather than this obscene nonsense.
Stupid damn cow.
*From what I can gather from a quick Google the biofuel consumption of wheat is approaching 15-20% of the entire UK crop as the third major factory comes online.