First they swallowed tasty bonuses - now speculation in wheat by City traders has swollen the cost of Christmas dinner

This article is more than 9 years old

This article is more than 9 years old

Investment bankers have come in for more abuse – not over their bonuses this time but for allegedly driving up the price of Christmas turkeys.

Paul Kelly, the poultry industry's "turkey man of the year", blames them for driving up the cost of wheat-based animal feed from £95 per tonne to £177.

"My contacts in the City tell me the price of wheat is soaring because of financial speculation," he said. "It's not good for farmers or consumers. What is happening is fundamentally wrong and obscene."

The boss of Kelly Turkey Farms in Essex warns that consumers can expect to pay up to £3 extra for their birds while Waitrose confirmed that its turkeys will cost 5% or 6% more than last year.

The increase in feed prices comes despite strong commodity supplies. Wildfires destroyed some Russian wheat during the summer, but the US and other grain producing regions have had good harvests.

Since the financial crisis began, market analysts have watched speculative money pouring into commodity derivative markets, including food. Many experts link this activity by banks and hedge funds to recent volatility and sudden inflation in the retail costs of food and energy.

The World Development Movement, a UK-based anti-poverty group, said the government needed to support measures being discussed inside the EU to regulate markets better and curb the behaviour of investment bankers and hedge funds.

"As City traders enjoy their Christmas bonuses, their speculative activities are fuelling food price inflation," said Deborah Doane of the WDM.

"This is bad news for the millions who live on the breadline in developing countries, as well as for hard-working families struggling to get by here in the UK.

"Even on Christmas Day, the British public is facing higher food bills at a time they can least afford it, as again we bear the brunt of bankers' greed."