April 22, 2008

US grain buyers call on government to rein market speculators

A hearing was conducted Tuesday in Washington before the Commodity Futures Trading Commission to scrutinize on the popularity of agricultural futures.

US grain buyers believe that the food's surging cost has coincided with unprecedented levels of financial speculation in grain-futures markets, The Wall Street Journal reported.

Consumers and Farm Belt market participants hurt by extremely volatile prices are asking Washington to rein in increasingly powerful commodity investors.

However, industry observers expect that the CFTC will not acknowledge that financial investors are driving up grain prices.

Grain buyers have complained about irregularities in wheat and other agriculture futures markets, in which cash prices for crops did not match the price of futures contracts at key delivery times.

Several grain exchanges like the CME Group Inc., the Minneapolis Grain Exchange; and the Kansas City Board of Trade, invited grain-market participants to express their concerns.

Buyers said that speculators' huge bets on relatively small grain exchanges are pushing up prices for regular consumers.