Food speculation has recently taken on a new form in the “securitization” of commodity trading. This type of financial speculation on food prices is relatively new, and there is widespread concern that it may be a primary factor behind skyrocketing food prices around the world. How real is the threat posed by food commodity securitization? How great is its impact?

Concern about securitization is rooted in the reality that food prices—which in recent history have undergone modest price fluctuations—are increasing at a rapid pace at the same time as securitization has become a major factor in markets.

This briefing examines how food securitization operates and explores the impact of securitization on recent surges in prices in global food markets. The analysis is based on a literature review, data analysis, and interviews with industry participants and experts.