The Federal Council adopted a report this Wednesday showing that speculation tends to attenuate price fluctuations.
Speculation does not play a determining role in the rise in food prices. A report, adopted Wednesday by the Federal Council, shows on the contrary that it tends to attenuate price fluctuations.
Marked increases in food prices can pose a significant problem for the poorest population groups, notes the government in a press release. In this context, we can question the role of speculative operations on commodity markets, namely voluntary risk-taking with the aim of generating a profit in return for the risks assumed.
According to the report, food speculation rather has a moderating effect on price fluctuations, since it contributes, among other things, to the liquidity of these markets. Rather, large price variations are due to other factors: extreme weather events (droughts or floods), low inventory levels, export restrictions and geopolitical events (such as the war in Ukraine).
The Federal Council welcomes more transparent agricultural raw materials markets at international level in recent years, which has improved their functioning. Several measures have been taken, internationally and in Switzerland, to increase this transparency.
No unilateral measures
The creation in 2011 of the Agricultural Market Information System, on the initiative of the G20, is part of this. This system publishes current data on global production, consumption, stocks and trade of wheat, corn, rice and soybeans.
The international coordination of the regulation of commodity futures markets, also implemented in Switzerland, has also contributed to this development. However, there is no agricultural products exchange in Switzerland.
Despite this, it is likely that factors in the real economy will continue at times to cause sharp price fluctuations, notes the government. However, he does not want to implement unilateral measures in Switzerland to further increase transparency on international markets.
Given the size of Switzerland, measures of this type would have practically no effect on international price formation and their cost-utility ratio would therefore not be good, he explains.
