The global food price crisis has been exacerbated by the war in Ukraine, but is actually due to more structural and systemic problems in the commodities market, creating hunger and threatening people's livelihoods, highlighted the EESC in an own initiative opinion adopted on 14 December.

Fuelled by conflict, climate shocks and COVID-19, the food price crisis is escalating as the war in Ukraine drives up the costs of food, fuel and fertilizers. The food price index reached a record high in 2022 against a backdrop of increasing food insecurity worldwide.

However, the scope and scale of the current price volatility can only be partially explained by market fundamentals. One of the underlying flaws is the opaque and dysfunctional nature of grain markets.

''Do not play with food, used to say my grandmother. Yet today many people are forgetting the real value of food and are gaming on it," said the rapporteur for the opinion Peter Schmidt, president of the EESC Agriculture, Rural Development and Environment section. "We show clearly that the current commodity market is not delivering for sustainable development, climate ambition and just transition. On the contrary, it undermines the efforts to solve hunger and foster fair revenues and prices"

The EESC opinion stresses that the global physical grain trade is highly concentrated. Four companies control an estimated 70-90 % of global grain trade. "While increasing food prices threaten food security globally, large trading firms are profiting. This is unacceptable!'', he said.

The EESC urges Member States and EU institutions to take the necessary steps to curb excessive commodity speculation, while recognising that commodity derivative markets provide key services to the producers and users of food commodities, such as risk management and price discovery. The EESC recommends:

• regulating the futures market for food derivatives, as was the case until the end of the last century;
• regulating commodities and food indexes, in particular by regulating and banning commodity index funds and replication via swaps and exchange traded products;
• addressing the financialisation of the food sector, e.g. by introducing a global windfall taxation on excess profits and a food speculation tax, as well as breaking oligopolies at all levels of the international food trade chain;
• enhancing market transparency by improving environmental, social and governance (ESG) reporting and non-financial disclosure of actors involved in speculation. (ks)