New Delhi (PTI): Attacking President George Bush for blaming consumption levels in India for the rise in global food prices, the CPI(M) on Thursday said the price hike was directly related to the recession in the US triggered by the subprime home loan crisis there.
Maintaining that the prevailing runaway rise in food prices could only be explained by speculation in the global foodgrain commodity exchanges, party Politburo member Sitaram Yechury said in order to cut their losses at home, "global speculators have chosen to shift their operations of derivative trading to commodity exchanges."
Noting that the multi-commodity exchanges in India averaged volumes of a massive sum of over USD three billion, he said in 2007-08, "the cumulative value of trade in this derivative market was a whopping Rs 40,65,989 crore."
Observing that such a massive dimension of speculative trading was being indulged in to make huge super profits, Yechury said for such super profits to be made, the speculators want that the government be "made so helpless that it should not have large stocks to dampen the spot prices at any moment."
"On the other hand, private trade must have adequate stocks to intervene to keep the prices high. For this to succeed, it is necessary that no effective mechanism for distribution of foodgrains (PDS) must exist in the country," he said, adding that this was "precisely what has occurred in India under liberalisation, resulting in this price rise."
"Thus, it is not inflation, but speculation, that is being imported," Yechury said in an editorial in the forthcoming issue of party organ ‘People’s Democracy’. Yechury gave the example of guar seed, saying that while its total production in 2005-06 was only six lakh tonnes, the volume of futures trade was 1,692.6 lakh tonnes valuing Rs 2,92,664.59 crore.
"With such a staggering level of speculative trading relentlessly pushing up the prices, the only way to provide relief to the people in India is by prohibiting speculative derivative trade in 25 essential commodities," he said.
Blaming "George Bush and company" for protecting this speculative international finance capital, he said "the prime movers of imperialist globalisation are seeking to divert the world’s attention by blaming the consumption patterns of Indians and Chinese. The real face of imperialist globalisation, however, cannot be masked."
Even if one has to assume Bush’s statements that Indians were consuming more food, he said its impact would be felt on the global market only if Indian exports were significant.
India’s share in total world exports was "a mere one per cent" of which agro-exports constituted only 11.7 per cent, he said, asserting that Indian consumption patterns "thus in no way contribute to the global food crisis".