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Speculators drive up price of Christmas turkey

Turkey farmers forced to pay more for feed will pass costs on to consumers

Betting on commodity prices by hedge funds and investment banks is fuelling a rapid rise in the prices of animal feed, thereby driving up the retail price of turkeys with Christmas approaching.

Turkey farmers say the price rise of wheat-based animal feed, from £95 per tonne to £177, is being fuelled entirely by speculators in the commodity food markets.

Turkey Farms in Essex as well as Waitrose have warned that turkey prices this Christmas are going to be about 5 to 6 per cent more than last year and consumers would have to shell out up to £3 extra.

Despite wildfires destroying Russian wheat crop during the summer, the US and Europe and other grain producing regions have had good harvests this year, resulting in strong commodity supplies.

Speculation entered commodity derivative markets, including food, after the financial crisis began. Banks and hedge funds indulged in this sort of activity following the recent volatility and sudden inflation in the retail costs of food and energy.

The World Development Movement has been campaigning to stop excessive speculation on basic foods as increased food prices are bad not only for consumers in the UK, but they also have a devastating impact on the developing world where over 1 billion people go hungry.