Will this work?
Perhaps I am mistaken, but I thought that such speculation could at best only temporarily influence prices… That such speculation generally worked to make prices more quickly reach market-clearing levels.
The article also seems to mention something regarding price controls for tortillas… could lead to supply shortages.
The idea is that the govt of mexico is buying corn that will be produced in the future, paying for it now. So that if the price later goes up, they need not worry, they already bought it at the current cheap price.
I wonder to whom they will sell this corn when it finally arrives. Will there be a line forming in some govt building, with each person entitled to buy a certain quota of corn? Or will they get it free, since they already payed for it in taxes? I guess if they have to pay for it, the result of the whole scheme is that they pay twice for the same corn, once when they were taxed to buy the futures, and once when they buy the actual corn.
Yes there was talk there of price controls already in place, and no hoarding, and anti monopoly laws. Expect shortages and riots.