By K.T. Arasu
CHICAGO, Sept 10 (Reuters) - Speculators may have inflated European wheat futures prices by as much as a third, French Agriculture Minister Bruno Le Maire told Reuters on Friday as he touted the benefits of position limits as a possible part of the country's push to toughen commodity market regulation.
Flexing France's muscle as it prepares to assume the presidency of the Group of 20 leading economies, he said more regulation of European commodities markets was needed to calm rising food prices and ward off starvation in poor nations.
Le Maire said he had found support among U.S. officials he met during his two-day visit to the United States, such as Agriculture Secretary Tom Vilsack, for his stance that yearly increases in food prices are "something we have to change."
"This is not only an economic problem but must be viewed as a strategic problem as well if we want to stop any (backlash) in developing countries due to starvation," he said in an interview in Chicago.
He said imposing position limits in European commodities markets "is something very interesting."
"We are ready to go this way. Position limits might be a very interesting solution but not the sole one ... it's something we are ready to work on," said Le Maire, whose country becomes G20 president in November.
The move by France to regulate European markets further comes in the wake of legislation in the United States to tighten regulation of financial markets after the economic crisis of 2009, and amid moves by the futures industry regulator to rein in speculation in energy and commodities.
But there has been little evidence as yet of much enthusiasm from other European regulators, particularly the Financial Services Authority of Britain, which has shown no appetite to impose similar regulation on the country's exchanges, which host most major European commodity contracts.
France has submitted detailed proposals to the 27-country European Union's executive arm urging joint action to regulate volatile commodities markets, two years after a rise in prices to record highs sparked food riots in some countries.
More recently, a drought in Russia that forced Moscow last month to suspend all grain exports well into next year caused U.S. wheat prices nearly to double between June and August.
Paris-based European milling wheat futures gained more than 60 percent in the five weeks to Aug. 5 on record volumes.
"Of course, there was this problem of dryness in Russia. But this should have raised prices in the market from 100 euros per tonne to, let's say, 140 or 150 euros. Not to 200 or 220," Le Maire said.
"This is the margin of speculation and this is what we want to fight ... want to alleviate," he said.
He said France wanted to "better organize" markets, adding that it would consult with the British government as most of Europe's biggest commodities markets are based in London.
"We do not want to jeopardize the UK's financial markets, which are vital to the UK," he added. (Additional reporting by Sybille de La Hamaide in Paris; Editing by Dale Hudson)