The current proposals by the European Securities and Market's Authority (ESMA) on the position limits under the Markets for Financial Instruments Directive (MiFID II) are not ambitious enough. "We are running the risk of not meeting the aims of MiFID II and of not containing speculation on foodstuffs properly", said Markus Ferber MEP who is the European Parliament Rapporteur on MiFID II.

ESMA has defined the position limits as a margin of fluctuation of 5 to 35% of deliverable supply. Position limits define the maximum share of available foodstuff supply which one single trader can engage in with transactions. Without any limitation of food speculation, very extreme fluctuations of food prices are possible. In 2008 for example, the price for wheat rose by 46% between 10 January and 26 February. Furthermore, without position limits, enormous market shares of supply can be purchased in one single transaction. In July 2010, a London-based hedge fund managed to buy 7% of the world output, or 241,000 tonnes, of cacao in one transaction which is enough to supply Germany for an entire year (source: United Nations, Food Commodities Speculation and Food Crisis).

"The other risk is that very low limits may lead to a standstill of the trade in illiquid markets. The ideal approach would be an individual limit to each contract", said Ferber. "I regret that ESMA was not ready for this. Now it is crucial to set the margin of fluctuation in a way so that we can actually meet the MiFID II aims. The European Parliament will now scrutinise the ESMA proposal thoroughly. We do not want to simply rubber-stamp it", he concluded.