Barclays, which announced an end to its speculation on food on Tuesday, made up to an estimated £278 million from the trade in 2012. The figure brings the bank’s total revenue from food speculation from 2010 to 2012 to an estimated three quarters of a billion pounds.
The bank has pulled out of speculative deals with hedge funds. Campaigners welcome this move but are disappointed by its decision to continue selling investment products that allow other financial players, like pension funds, to speculate.
The £278 million figure was released today by the World Development Movement, which is calling for regulation to prevent banks betting on food prices and contributing to the global hunger crisis.
Barclays has been the leading UK player in speculating on food. Goldman Sachs is widely recognised as the world leader.
Barclays’ withdrawal follows announcements in 2012 by several German, Austrian and Scandinavian banks that they would reduce or suspend trading in food commodity markets. But German giant Deutsche Bank, one of the banks indicating a withdrawal, has since returned to speculating on food.
Legislation to curb speculation is on the table at the EU, but the UK government has so far opposed effective controls.
World Development Movement campaigner Christine Haigh said today:
Barclays’ announcement is a welcome step. One of the world’s biggest banks has acknowledged that gambling on food is not an acceptable way to make money, and other speculators like Goldman Sachs should take heed. But Barclays remains in the market peddling investment products which enable others to speculate on food prices, and could return to larger scale speculation at any time. The only thing that will prevent banks driving up prices is tough regulation, and this is what the UK government should be supporting.