Goldman Sachs is one of the largest players in the commodity market, yet they do not grow or sell wheat, corn or sugar. They sell only money.
About 10 years ago the commodity market was a place where farmers and food processors could meet and trade their goods. They fixed prices for their products, this protected the income of the farmer in case prices would fall, but also protected the processor in case prices would rise. A single speculator could be of use as an intermediary.
But since GS cracked open the market in 1991, after a successful political deregulation campaign, the number of speculators has grown steadily. They buy huge parties ‘future’ grain, only to later sell them at a higher price. Through this acquisition, they increase demand and drive up prices artificially. Once all these speculators want to sell their ‘future’ grain, the price can completely collapse by excess supply. The price variations are felt most by poor people. They spend 80% of their income on food. A price increase of 71% (increase in 2008) puts this basic need for them out of reach. Farmers all over the world can no longer provide for their family as the commodity price is too unstable.
In 2008, when food prices had reached historic highs, in over 30 countries hunger riots broke out, and over 100 million people became undernourished. Many more had to stop their education or could no longer afford medical care.