State of the Art on food price speculation
INTRODUCTION
CCF, CCFD Terre Solidaire, Food Watch, Oxfam-Solidariteit, SOS Faim and Woord en Daad, hereafter the Coalition, launch an Invitation to Quote (IQ) for a state of the art on food price speculation
The quote must arrive at latest on 7th of August 2023 midnight CET and stay valid until 18th of August 2023 midnight CET.
The Invitation to Quote (IQ) is structured as follows:
- Terms of reference
- Submission procedure
- Decision procedure
The consultant’s quote could form the basis for a contract between him and the Coalition. However, this invitation to quote does not obliges the Coalition to proceed with the actual act of purchasing. No compensation can be claimed in case of non-acceptance of a quote or non-award of a contract.
Oxfam Solidariteit’s General Purchase Conditions apply. If there is an inconsistency between any of the provisions of these Conditions and a particular provision in the IQ or a contract then the provision in the IQ or the contract will prevail.
1. Terms of reference
1.1. Background
The Coalition seeks to understand the mechanisms behind food price speculation and the impact speculation on the financial markets has on the price and price volatility of basic food products.
The deregulation of financial markets has increased since 2000. After 2008, new regulations on commodity derivatives markets were put in place, but partly dismantled during deregulation in times of the covid-19 pandemic. Since then, many new big commercial and financial players are participating in the food markets. Financial speculation on commodity derivatives markets (especially futures trading on exchanges) is seen as driving up food price volatility and food prices by a number of scholars. On the other side, this vision is contested by influential institutions (such as FAO, IFPRI, and others), maintaining that speculators are necessary to maintain liquidity in the market to, hedge risks, and based on their analyses show there is no / not sufficient causality between speculation and higher food prices. Others do not agree with this (including UNCTAD), stating that essentially there is now too much liquidity in the market driving up prices, and regulation is much needed.
Considering that food price speculation is complex due to the multiple financial products and actors it involves such as traders, investors, speculators, governments and the different interests and motivations at hand, we realise it makes it quite difficult to regulate but also makes it difficult for advocacy organisations to target the right policy making processes at the right time and with the right decision makers.
1.2. Purpose and objectives of the research
Considering the complexity of the matter, the lack of a coordinated coalition of NGOs following closely food price speculation in the context of the MIFID, the war in Ukraine and the inflation, the Coalition is looking for a consultant to produce a state-of-the-art report on food price speculation, that will provide the Coalition with an overview of existing literature, synthesise the content of the said literature and share the most relevant conclusions considering today’s current global food crises and our focus on the right/access to food for all.
With this study the Coalition wants to ultimately contribute to the public debate and put the need for regulation higher on the political agenda, through:
1. Achieving a better understanding of the basics of food price speculation, what their role is in price setting and to price crises in the past and what is driving them today (see questions).
2. Inform and build capacity within civil society in order to enable them to formulate a new angle of advocacy and ultimately put the regulation of food speculation higher on the political agenda.
3. Point out what additional research can be conducted to contribute to the public debate, possibly in the different countries of the Coalition (NL, BE, FR) if major variations are noticed (i.e. be ‘newsworthy’ for media-outlets).
