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Introduction:

Let&rsquo;s start this task by discussing the question: When do we face price speculation? 
&nbsp; 
We face speculation when someone:
<ul>
	<li>Sells goods or services for higher prices than those allowed according to the statutory laws that they are subject to;</li>
	<li>Alters, under any pretext or by any means and with intent to obtain unlawful profits, the prices of goods or services arising from the regular exercise of an activity, or, independent of intent, which would not adhere to the law in force.</li>
	<li>Sells goods or services for a price higher than that found on tickets, tags, labels or lists drawn up by the seller or service provider.</li>
	<li>Sells goods, which should have a certain weight or size per unit, when a unit is smaller or lighter than this weight or size, or when the units are contained in packages or recipients which contain less than the amount specified.</li>
</ul>
&nbsp; 
Two cases have been reported to the appropriate bodies in Mozambique:
<ul>
	<li>Some gas and bread sellers have increased prices without legal authorization because there has been a lack of gas and flour.</li>
	<li>Some dishonest and speculating sellers of sugar have falsified their accounts and measurements by selling customers 200 grams less of sugar in every kilogram.</li>
</ul>
&nbsp; 
Speculation is a crime. Speculation is prohibited in any sector whatever it may be. This prohibition aims to protect consumers and provide a secure legal relationship. 
&nbsp; 
Speculation has always been an element of the international commodities market and of the stock exchange in general. Manufacturers need raw materials to turn into commercial products. For example, a textile factory may need cotton or linen to make into fabric. Wheat and corn are used in making wheat flour and corn flour. &nbsp; 
&nbsp; 
Whether we like it or not, the fact is that for years the global raw materials market has been grappling with the heavy presence of speculators from the financial world, many of whom have never even seen the products they trade. This has made the market extremely volatile, with sharp market highs offering no justifiable reason for high prices. 
&nbsp; 
One of the main functions of a trader, who is not always a speculator, is to move the physical goods, real and tangible, from the producing country to the consuming country, chartering transport for this (usually sea) and/or renting storage facilities. 
&nbsp; 
Many of these transactions are far from being transparent and are often carried out by private entities that escape the attention of the analysts. So, we are left with a market that no longer takes into account the supply and demand of a product, i.e., the real market. 
&nbsp; 
The situation is so serious that the G20 has set a priority to &ldquo;regulate speculation which plays with the prices of food and commodities in an irrational and brutal manner.&rdquo; 
&nbsp; 
After all, commodities are now a new class of assets vying alongside stocks, shares, bonds and property. Hence, the markets are unbalanced and two principles appear to be gaining ground: 
&nbsp; 
1. Commercial protectionism favors speculation by reducing supply. 
2. Agricultural land is becoming more and scarcer, which is leading to an unavoidable rise in international commodity prices. With so much speculation in evidence, prices could not only rise, they may also fall just as quickly! (in the Le Monde newspaper) 
&nbsp; 
In this course we will look at speculation in food prices. Nothing is more important to human beings than food. Food is the most basic need and a human right according to the Universal Declaration of Human Rights. 
One aspect of food security is the price of food. 
&nbsp; 
In 2007, the global food prices rose 40%. Then they decreased for a while just to rise again in 2008. It was the fastest rise in food prices in the last 14 years. In 2010, food prices were 126 % higher than in 2002. The UN found out that sharp increase in food prices led to malnourishment of an additional 130 million people worldwide. 
&nbsp; 
It is normal that the food prices swing under 1% every year due to the relation between supply and demand, harvest loss or overproduction, increase in fuel and fertilizer prices. But such rapid increase in prices was caused by speculations. Let&rsquo;s find out how speculations work and what consequences they have on people. 
&nbsp;

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