WASHINGTON — Hayden Wands, director of procurement at Sara Lee Corp., will testify July 21 on behalf of the American Bakers Association before a Senate Permanent Subcommittee on Investigations regarding alleged excessive speculation in wheat markets.
The hearing follows a report issued June 24 in which the committee concluded excess speculation contributed to dramatic increases in volatility and a rise in prices to record highs in 2008.
Robb MacKie, president and chief executive officer of the American Bakers Association, said the bakers welcome the chance to "discuss solutions to excessive speculation."
"This has been an ongoing issue for the baking industry for quite some time now," said Robb MacKie, president and chief executive officer of the American Bakers Association. "Volatility caused by index speculators has greatly reduced the effectiveness of the markets to act as a mechanism for price discovery."
Mr. Wands said the market problems of 2008 have not disappeared.
"No baker needs or wants to be reminded of the drastic volatility experienced in early to mid-2008, when wheat prices skyrocketed to record high levels," Mr. Wands said. "The problem is that this volatility continues today, with recent daily price movements of 60c (a bus). One solution to the extreme volatility we have been experiencing is to place limits on the amount of wheat speculators can purchase, something that A.B.A. believes is a logical policy to implement."
Mr. MacKie said placing limits on index funds would help diminish market volatility and "aid in returning the direction of the markets to their original intent."