It’s easy to be blasé about commodity prices when you’re a wealthy American or European, and say “markets will be markets”. But if a large part of your income was going on oil or food, a 250% price rise in three years might bother you. Governments cannot duck the issue of whether speculation has created unnecessary volatility in commodity prices. It is time for the futures industry to stop trying to throw the regulators off the scent and engage seriously with the issues.
The truce between politicians and the futures markets is over after less than a year. Hostilities were reopened by Gary Gensler, new chairman of the Commodity Futures Trading Commission, when he announced on July 7 a consultation on whether the CFTC should set its own position limits for all commodities trading, as it does already for agricultural products. How hedge...