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The economists sent a letter to the finance ministers who will be debating the issue of commodity speculation. They said, "Excessive financial speculation is contributing to increasing volatility and record food prices, exacerbating global hunger and poverty. With around 1 billion people enduring chronic hunger worldwide, action is urgently needed to curb excessive speculation and its effects on global food prices."

Economists from top universities including Cambridge, Oxford, Berkeley, and the London School of Economics have signed the letter, adding their voices to an escalating international campaign. In the letter, the economists recommend that "Limits could be set at a level that would maintain sufficient liquidity in the markets while preventing an excessive concentration of purely financial actors."

The letter comes less than a day after the latest FAO report, in which the organisation warned "food price volatility featuring high prices is likely to continue and possibly increase."  Furthermore, G20 agriculture ministers have called on their finance counterparts to introduce tighter regulation. 

The move against speculation, which France has pledged to pursue as part of its presidency of the G20, has become something of a cause célèbre; The United Nations Food and Agriculture Organisation (FAO), the Pope, French President Nicolas Sarkozy and Starbucks CEO Howard Schultz have all pledged their support for measures to curb speculation.

Although many countries support these calls, some, the UK amongst them, plan to block any attempt to create legislation aimed at controlling over-speculation. The previous attempt by France to curb the power of speculators via an ‘early warning system’ introduced at the first G20 agriculture talks were criticised as a “sticking plaster” solution.

Following the talks in June, Oxfam policy advisor Jean-Cyril Dagorn lamented, "Fixing the global food system and ending the food price crisis requires major surgery yet the G20 produced little more than a sticking plaster. Agriculture Ministers agreed to address some of the impacts of high and volatile prices but failed to introduce the measures needed to prevent prices spiralling out of control in the first place."

Neil Kellard, Professor in Finance at the University of Essex, one of the signatories of today’s letter, explained the negative impact of speculation on raw agricultural materials, "Over-speculation can steer commodity prices away from fair levels indicated by the supply and demand for food and push the poorest further into chronic hunger. Conversely, very little evidence exists that the recent high levels of commodity investing are necessary to meet hedging demand or promote pricing efficiency in financial markets. Position limits can be set to dampen commodity price movements whilst maintaining and probably enhancing market function."

Deborah Doane, director of the World Development Movement, expressed hope that the letter would influence the G20 ministers to act more decisively, yet she still expressed reservations, "Excessive lobbying from the finance sector seems to be delaying political action, both here in the UK, and elsewhere. This is despite the obvious suffering caused by speculation on this most basic human need, and despite the growing number of voices calling for action. Instead of propping up cynical financial gambling by speculators, the G20 finance ministers must act to ensure that strict rules are put in place to limit the hold of bankers over the world’s food markets."