Futures and Starvation

Futures have existed for over two millenia and people on the losing end have been unhappy almost as long.  They continue to exist at least partially because commodity producers, e.g., farmers, want to know before they plant a crop that they can sell it for a profit.  And all business people like to reduce uncertainty.  It is also clear from the story attributed to Aristotle in the Wikipedia entry linked above, that futures have been used for speculation.

A post by Paul Kedrosky on an analysis of recent food price increases points to investor speculation and ethanol conversion (e.g., in the US converting corn to ethanol for auto fuel).  There are other ways to speculate in food besides grain futures, but it is one of the most common ways.

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