By Andrei Skvarsky.
J.P. Morgan, the US-based bulge bracket investment bank, argues that price benchmarks set in futures markets can help to get rid of distribution and other imbalances that leave 868m people across the world undernourished.
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Today’s global food supply exceeds minimum dietary energy requirements by 50%, and the fact that so many people are still hungry suggests “inefficient distribution networks” and “unhealthy dietary habits among some consumers”, says a report by J.P. Morgan’s global commodity research team.
Futures markets would be able to put an end to those imbalances by providing reliable and fair price benchmarks and reducing price volatility in a resource-constrained world, according to the report, entitled Commodity Markets Outlook and Strategy—Nine billion bellies: Managing food, water, land and air to 2050 and written by Colin Fenton, Megan Hansen and Elizabeth Volynsky.
According to the World Bank, agriculture is the main source of income and employment for 70% of the world’s poor who live in rural areas, but it is that part of the global population that remains the most hungry.
J.P. Morgan’s report says 98% of the world’s undernourished population is located in developing regions of Africa, Asia, Latin America, the Caribbean and Oceania.
The global population is expected to grow by 2bn within the next 30 years.
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