http://biz.thestar.com.my/news/story.asp?file=/2008/5/22/business/21321147&sec=business

“Speculation is exerting pressure on agriculture-based commodities—now facing competition with regard to their use as food and a source of energy—and sending prices to unprecedented levels. This is in turn fuelling the current global food crisis, according to economists.”
“Economists contacted by StarBiz concur that exchange-traded fund and hedge fund players had been more visible in the commodity futures market than actual buyers and sellers of commodities. This, they claimed, has created drastic changes in the traditional valuation of food commodities, especially staples like rice, soybean, wheat, corn and vegetable-based edible oils.”
“… A new set of variables has emerged as food is also priced as an energy source. On the supply side, global inventories of food commodities like corn, wheat and vegetable based edible oils are at historic lows.”
“Over the past three years, prices of agricultural commodities have increased substantially and the fluctuations in the US Dollar have also led to inflation of food and transportation costs.”
“Since 2000, global food prices have risen 75%, with the price of wheat soaring about 200%. This year, rice, soybean and corn price also posted all-time highs and the increasing costs of grains has led to higher prices of meat, poultry, eggs and other dairy products.”
“Strong demand from China and India, the biofuels story and lower global food-based inventories have put pressure on the prices of most food commodities worldwide.”
“In addition, the recent drought and floods in the world’s largest food producing nations of US, Australia, Canada and China, have also stifled crop forecasts, thus putting further upward pressure on prices.”
“A commodity trader said speculation in the commodity market had created an imbalance by reducing market liquidity instead of increasing it. There are growing numbers of investors chasing too few commodities contracts, thus creating demand for the underlying commodity, which drives up the price. If inflation is on the rise, investors will take commodity stocks to new heights as they seek a safe haven from rising prices.”
“Rice, a staple food for nearly half the world’s population, drew concerns in recent weeks as spiraling prices prompted several countries to impose anti-inflationary measures as well as drastic limits on exports in order to protect domestic consumers.”