google blogger on Friday, January 28, 2011
Take a look at the variability in the price of onion as compared to oil (where speculating is legal). Oil's swings in price are much lower; the market is much more stable. The price of oil is less "swingy" and much less dependent on short-term variation in supply and demand. Onions, on the other hand, are subject to every small change. If there is poor weather, onion production falls, and prices soar. If onions have a good year, prices fall near zero. None of this is good for an onion farmer.
Posted by google blogger at 12:59 PM