October 6, 2022

Hemp Traders See Record Revenue Amid Food Crisis, Prompting Calls For Windfall Tax

Major grain traders have attracted concerns over profiteering plus speculation in global food markets

Major grain traders possess drawn concerns over profiteering and speculation in global food markets, prompting calls for a windfall tax.

According to  The Guardian , the world’s top four grain traders (Archer-Daniels-Midland, Bunge, Cargill and Louis Dreyfus, known collectively as ABCD) have seen  record or near-record profits  or even sales, and are forecasting demand to outstrip supply till at least 2024 – likely leading to even higher sales and profits over that period. The four companies control in between 70% and 90% of global grain trade.

Cargill  reported a 23% jump in profits to a record $165bnfor the entire year ended May 31, whilst Archer-Daniels-Midland recorded the highest revenue in company history throughout the second quarter of this year.   Bunge  saw sales spike 17% in Q2, while Louis Dreyfus reported an  80% jump in profits for 2021  versus the previous year on revenues of $1. 62bn, the jump of nearly 25%.

According to the UN Food and Agriculture Organization,   food prices have spiked over 20% this year  – while around 345 million people suffer from severe food insecurity according to the Entire world Food Program, vs . 135 million people before the Covid-19 pandemic.

Olivier De Schutter, the co-chair of IPES-Food (the International Panel of Specialists on Sustainable Food Systems) and UN special rapporteur on extreme poverty and human rights, said: “ The fact that global commodity leaders are making record profits at a time when hunger is increasing is clearly unjust, and is a terrible indictment of our meals systems. What’s even worse, these companies could have done more to avoid the hunger crisis in the first place. ” -The Guardian

The increasing price of grain has many causes – including the war in Ukraine, one of the biggest producers of grain, sunflower oil, maize, and fertilizer. In addition ,   heatwaves in Europe, North America and Indian have affected production, while last year’s heatwaves in Canada hurt wheat harvest yields. Ongoing high temps and wildfires this year will likely lead to further disruptions.

“ Global grain markets are even more concentrated than energy markets as well as less transparent, so there is a huge risk of profiteering” said De Schutter, who seem to added that this year’s food price surge happened among what was thought to be abundant global grain reserves. He says the ABCD companies weren’t transparent in revealing how much materials they hold, and body fat way to force them to release stocks in a timely fashion.

“ We need to be looking at the particular grain giants and requesting what they could have done to avert the crisis, and what they could be doing now, ” he said.

Not intentional?

Moody’s expert John Rogers says not necessarily surprising that supply constraints along with a jump in demand led to increased grain prices and, consequently , higher profits.

“ I don’t think they may be colluding for outsize earnings, ” he said, incorporating that other companies have been taking an increasing share of global grain markets.

“ I don’t think they may be acting immorally –   they’re not intentionally driving up prices. ”

Between the Ukraine war and heatwaves,   feed producers stand to benefit greatly  – as demand for their product surges amid constrained supplies.

“ Ultimately, we need to split up the monopolies that have a stranglehold on the food chain. A handful of companies control worldwide seed and fertiliser marketplaces, animal genetics, the global feed trade, and food store. They are making huge profits at the cost of farmers, customers and the environment, ” mentioned De Schutter.

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