Germany Backs French Commodity Regulation Plan
Source: Reuters (4/13/11)
"France urges G20 nations to support limits on commodities trading positions, allowing for intervention at times of instability."
Limits on positions individual investors can hold in commodities along with limits on daily price movements are "worth considering", Aigner said in a statement on Wednesday.
France said on Monday it would urge G20 nations this week to support limits on trading positions and margin calls in commodities markets, allowing for intervention at times of proven instability.
French President Nicolas Sarkozy has called for tough measures to limit speculation in commodities markets, which he blames for driving up global prices of oil and food.
Aigner said on Wednesday that more transparency was needed in agricultural commodities markets to limit the impact of speculation.
The G20 group, which includes rich and developing nations such as China, India and Brazil, is meeting in Washington this week. France says it will push for backing of its plan to restrict outside financial investment in commodities markets.
Aigner said limits on daily commodity price movements should be considered for specific products including grains and soybeans.
Market oversight authorities could then intervene automatically and decide whether trade should be temporarily stopped, she said.
Regular reports on commodity market trading positions, common in the United States, should also be introduced elsewhere, she said.
"A prime principle must be more transparency," she said.
It must be clear to all sides which groups are using the commodity markets for financial investment and which are seeking to actually buy the raw materials themselves, she said.
"Food markets may not become the object of speculators," she said. "Food and agricultural commodities are not just another product. They involve the basis of life for billions of people."