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Commodities Traders May Face Curbs Under EU Proposal [View All]

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Joanne98 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-02-11 08:54 AM
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Commodities Traders May Face Curbs Under EU Proposal
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Source: Bloombergs

Commodity traders in the European Union may face restrictions including position limits under proposals from the European Commission aimed at curbing excessive price volatility.

Curbing the proportion of a commodity derivatives market that a single trader can control may help rein in excessive speculation, the commission said in an e-mailed statement. Price fluctuations hurt farmers, food-makers and consumers, including in the poorest countries, the commission said.

We need regulators to keep a closer eye on positions taken up in respect of commodity derivatives, Michel Barnier, the EUs financial services chief told reporters in Brussels today. This will include the possibility of introducing position limits if necessary, he said. Personally speaking I believe in this.

French President Nicolas Sarkozy said in Davos last week that speculation was driving up food prices. World food costs rose to a record in December on higher costs for sugar, grain and oilseeds, according to a United Nations report earlier this month, contributing to the uprising that ousted Tunisias Zine El Abidine Ben Ali on Jan. 14. Protests have spread to Egypt, Algeria, Morocco and Yemen.

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