SUDHIR KAPUR SINCE 2001, the international community is engaged in framing acceptable rules for agricultural, non-agricultural and services market access under Doha round of World Trade Organisation (WTO) negotiations. Even as these negotiations are on, the issue of excessive speculation resulting in price volatility in commodity markets, which is causing drain of wealth from importers of food, fuel and metals to producers of these commodities, is becoming a cause of increasing concern. The Drain of Wealth theory, first propounded by Dadabhai Naoroji in 1867, was set in a much different perspective of economic colonisation of India to service the needs of Industrial revolution in Britain. However, the sharp rise in commodity prices, observed during the past 2-3 years, is causing a drain of limited wealth of relatively weak nation states, and has the potential of distorting the political-economic-trade balance of the world. During the year 2007, the prices of oil, wheat and rice have more than doubled while those of corn and soybean have gone up by 55 and 42% respectively. Other metal and mineral based commodities have also risen by 2-3 times during past few years. Since 1999, there has been an overall increase of 286% in the price index of all commodities with food price index going up by about 100% and crude oil price index by about 600%. This increase in commodity prices above their true value (real value adjusted for inflation), and the increasing price volatility, has created macroeconomic instability in many developing countries. At a recently concluded Jeddah summit of oil producing and consuming nations, Saudi Arabia blamed the unprecedented rise in oil prices to speculators. It is believed that a realistic price of oil should be around $65-70 per barrel, based on International Energy Agency's projections of sufficient oil to meet an expected increase in world demand from 84 million barrels per day in 2005 to 116 million barrels per day in 2030. Thus almost half the current price of oil is because of speculation. International forums such as the 13th World Petroleum Congress in Madrid, International Grains Council in London and recent US congressional investigation into activities of investment funds in energy markets have deliberated on the issue but they have not focused their attention on the question of speculation. Of course, the Indian government has imposed a ban on futures trading in eight agro-commodities at domestic exchanges to control speculation. According to Barclays Research, there has been a 20-fold increase in participation in commodity futures market by investment funds