Monday, June 29, 2009

Congress eyes market impact of speculators: Vilsack


CHICAGO (Reuters) - Congress is eyeing ways to make sure speculative trading helps commodity markets rather than distorting pricing signals, U.S. Agriculture Secretary Tom Vilsack said in a Reuters Television interview Monday.
"There are concerns," Vilsack said, noting he has spoken about the issue with Tom Harkin, chairman of the Senate Agriculture Committee, about the issue.
"I suspect that there will probably be an effort to make sure when there is trading that takes place on the market, that it`s trading that actually assists the market, doesn`t hurt the market, creates a robust trading scheme so that we get a good pricing signal," Vilsack said.
Grain futures markets are bracing for more government regulation after a U.S. Senate probe blamed index funds for overinflating wheat prices last year.
Vilsack was slated to tour the Chicago Board of Trade on Monday with executives from parent company CME Group Inc, the world`s largest derivatives exchange, which has said speculators were not responsible for price volatility.
Food prices soared to record levels last year, causing riots and hoarding in some countries.
While prices have come down from the spike, they remain at historically high levels, especially in developing countries.
Vilsack was also slated to speak to about the Obama administration`s approach to global food security on Monday.
The Obama administration has said it will ask Congress to double agricultural development aid to $1 billion by 2010.
"It is part of national security, it is part of foreign policy, it`s part of our trade policy. It`s part of our economic recovery efforts," Vilsack said.
The United Nations` World Food Program has pleaded with rich nations to maintain food aid as more than a billion people are chronically hungry at a time when global food aid is at a 20-year low.
Original article

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