Bureau Recommends: Food speculation and the price of tortillas

The Bureau recommends an investigation by the Ecologist magazine into how speculation is pushing up the price of maize in Mexico.

Two years ago a kilo of tortillas, a staple of the Mexican diet, cost 2 to 3 pesos.  Today it costs up to 12 pesos.

The price rises have been partly blamed on an increase in investors buying futures contracts. Futures contracts were originally intended to protect farmers against bad harvests by agreeing a set price for their crop in the future.

Now these contracts are being bought and sold by speculators with no connection to agriculture, which charities and the UN special rapporteur on the right to food say is pushing up the price of food.

In 2000 a total of $6bn was speculated on commodities, but this has risen to $340bn, of which $126bn is believed to be invested in food.  There is an ongoing debate as to the extent by which commodity speculation has an impact of food prices.

The higher prices mean families in Mexico are having to cut back on other food such as fruit and vegetables, and spend less on education and healthcare. Some have even had to take out loans to pay for food.

Read the full investigation and watch a short film here.