In his article “Food speculation: ‘People die from hunger while banks make a killing on food,’” John Vidal argues that deregulated speculation in commodities — which began in 1991 when the Commodities Futures Trading Commission (CFTC) secretly granted 19 banks exemptions from hedging regulations — is increasing global food prices and contributing to hunger. According to the article, the most tangible effects of this were first felt in 2008 when, during the global financial crisis, unprecedented food speculation activity caused excessive fluctuations in commodity prices.
We have created a number of visualizations to illustrate the discussion about deregulation in commodities speculation and its effect on food prices and hunger.
MAP
In Vidal’s article, he suggests that western Malawi “went hungry” in 2008 even though “there had been no drought…there was plenty of food in the markets…and there was no evidence that the local merchants were hoarding food.” Even so, Vidal writes, “there were food riots in more than 20 countries.”
Our map visualizes where food riots occurred in Africa — the country most affected by the 2007-2008 “world food price crisis.” Users can click on each affected country and learn what happened during each riot and what the principle causes were. In many cases rising food prices caused the riots. The map does not, however, show what caused the spike in food prices.
GRAPHS
In order to show the relationship between commodities speculation and rising food prices, we gathered investment data from the U.S. Commodity Futures Trading Commission (CFTC) and commodities price data from IndexMundi.com.
The first graph displays the commodity prices of cereals between 1997 and 2012, and clearly shows massive price increases in 2008 and continued fluctuations since then.
The second graph displays that heightened activity in commodity futures investing since 2008 corresponds quite closely with the fluctuations in commodity prices.
