It finds that unregulated financial activity significantly contributed to the profits of global food traders in 2022.

Corporate profits from financial operations appear to be strongly linked to periods of excessive speculation in commodities markets and to the growth of shadow banking – an unregulated financial sector that operates outside traditional banking institutions.

During the period of heightened price volatility since 2020, certain major food trading companies have earned record profits in the financial markets, even as food prices have soared globally and millions of people faced a cost-of-living crisis.

Food trading companies take positions and function as key participants in financial markets, but this shadow banking function is not regulated in the current financial system.

Patterns of profiteering in the food trading industry reinforce the need to extend systemic financial oversight and consider corporate group behaviour within the framework of the global financial architecture.

Read More: Trade and Development Report 2023 Growth, debt, and climate: Realigning the global financial architecture