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Latest headlines

Federal commission charges Kraft, Mondelez with manipulation of wheat prices

By Jeremy Gerrard
April 2, 2015

Federal commission charges Kraft, Mondelez with manipulation of wheat pricesThe US Commodity Futures Trading Commission (CFTC) filed civil complaints in US District Court Wednesday against Kraft Foods Group, Inc. and Mondelez Global LLC, charging the companies with manipulation and attempted manipulation of the prices of cash wheat and wheat futures which led to over $5.4 million in profits.

“This case goes to the core of the CFTC’s mission: protecting market participants and the public from manipulation and abusive practices that undermine the integrity of the derivatives markets,” said Aitan Goelman, CFTC director of enforcement.

The commission says both companies used “manipulative trading strategies” to execute a strategy in December of 2011 that artificially lowered wheat prices.

According to the complaint,  in response to high cash wheat prices in the summer of 2011, Kraft and Mondelez developed a plan to purchase $90 million of wheat futures in December. The complaint states that the companies never intended to take delivery of the wheat and instead used this strategy with the expectation that the market would react by lowering wheat prices.

In its continuing litigation against Kraft and Mondel?z, the CFTC seeks a permanent injunction from future violations of federal commodities laws, disgorgement, and civil monetary penalties.

 More on the charges can be found here. 

KEYWORDS: food and beverage manufacturing food processing industry food supply

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Jeremy Gerrard was Food Engineering's Digital/Online Editor. He is a graduate of Auburn University with a degree in journalism. His previous work experience includes years spent as a reporter with the Daily Local News out of Chester County, PA. In addition to writing feature articles for Food Engineering, Jeremy covered the Dry Processing, Field Reports and People and Industry news sections.

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