Direction: The financialisation of commodity trade and current extraordinary conditions in global financial markets could have influenced the spurt in prices. The recent reductions in interest rates in the US and the injection of liquidity have resulted in investors seeking new avenues such as commodity markets, in view of the turbulence in financial markets and the low return in treasuries. The relatively easy liquidity and low interest rates, by themselves, make holding of inventories attractive and thus induce greater volatility in commodity markets. The weakening of the US dollar is also advanced as a reason for the recent volatility in commodity markets, including food items. It is evident that this phenomenon is now also coinciding with the across-the-board rise in food prices.