Food commodity derivatives: a new cause of malnutrition?

Poverty causes malnutrition, but malnutrition also contributes to poverty through increased morbidity, impaired development in children, and reduced capacity for work and productivity in adults. In rich countries food is a relatively small part of household consumption (10–15%). But in poor countries many households (especially those of wage labourers and landless people) use a large share of their income (40% or more) to buy food, so food price rises adversely affect purchasing power by reducing real income. There is compelling evidence that the recently expanded market in food-commodity derivatives has led to large increases in speculative investment, pushing global food prices far higher than predicted by demand-supply effects. This paper is an attempt to analyze the relationship between food commodity derivatives and food prices