Barclays PLC , has made as much as half a billion pounds in two years from speculating on food staples such as wheat and soya, prompting allegations that banks are profiting from the global food crisis, The Independent in London reported Saturday citing research from the World Development Movement.
Barclays is the U.K. bank with the greatest involvement in food commodity trading and is one of the three biggest global players, along with the U.S banking giants Goldman Sachs GS +0.95% and Morgan Stanley MS +0.67% , the research points out.
The revenue that Barclays and other banks make from trading in everything from wheat and corn to coffee and cocoa is expected to increase this year, with prices once again on the rise.
The bank claims not to invest its own money in such commodities, the newspaper said. Barclays declined to comment on the amount of money it makes from trading in agricultural commodities Friday.
The bank defended its actions, pointing out that trading in so-called futures contracts-an agreement to buy or sell a certain quantity of a product, at a given price on an agreed date-helped parties such as farmers and bakers to hedge against the risk of rising or falling prices. “Our clients include investment companies, food producers and consumers who, among other things, seek our help to manage risks.”
Barclays also declined to comment on whether it thought large amounts of speculation pushed up prices and volatility.
Marketwatch
