Highlights:

Chapter 3 of the report is dedicated to “Food Commodities, Corporate Profiteering and Crises: Revisiting the International Regulatory Agenda”.

The stark contrast between the surging profits of commodity trading giants and the widespread food insecurity of millions underscores a troubling reality: unregulated activity within the commodities sector contributes to speculative price increases and market instability, exacerbating the global food crisis.

This presents significant obstacles to effective policy measures. At the same time, an intricate web of cross-sector connections and high volume of intragroup corporate activity in the industry complicates efforts to establish transparency and accountability.

Profiteering from financial activities now drives profits in the global food trading sector. Yet commodity traders circumvent existing regulations: they are not regulated as financial institutions but are treated as manufacturing companies.

This report calls for a fundamental revision of this regulatory approach. It is imperative to develop tools to enhance transparency and accountability in this opaque yet systemically vital global industry. Policymakers and regulators need to foster a future where equity replaces excess, and the global paradigm shifts from profiteering to purposeful sharing for the betterment of all.

Specifically:

• Profiteering prompts the need to reevaluate corporate group membership and the behaviour of major players in food trading.

• Regulators should recognize the financial aspects of food traders’ activities as systemically important and extend relevant regulations. Measures proposed here at the corporate–finance nexus can enhance wider efforts to combat financial speculation and profiteering.

• A set of market-level, system-level and global governance reforms are needed to align the international financial architecture with recent developments in the opaque, underregulated yet strategically vital commodity trading industry.