Commerzbank to Stay Away from Speculative Trading in Food Commodiites

Aug 10, 2012 04:58 AM EDT | By Sharon Robinson

commerzbank
Commerzbank has now banned agriculture from its exchange trade fund. (Photo : flickr.com)

 

Speculating over the prices of grains has long been touted as one of the reasons for the soaring price of food, and consequent civil unrest in many countries. As a result, Commerzbank has now abolished investments in agriculture.

Like Us on Facebook

Commerzbank, Germany's second largest bank, has refused to give many details about its move to remove agricultural commodities from an exchange trade fund (ETF), but, Foodwatch, a German lobby group, claims that this decision is based on ethical concerns.

"Commerzbank is reacting to the debate about a series of studies which show that investment in this type of commodity fund pushes food prices upwards and so contributes to the hunger crisis in many parts of the world," Foodwatch told Reuters.

A spokeswoman for Commerzbank said Thursday that agriculture has been removed from ComStage ETF CB Commodity EW Index TR, a fund which has assets of $14.1 million.

Commerzbank is just one of several banks in Germany which have responded to criticism over speculation of price of food commodities by restricting investments. In March Deutsche Bank, Germany's largest bank, said it would not issue new investment products in agricultural commodities this year while it researches the impact of investment in commodities on food prices.

DekaBank has also pulled out of investing in several basic food grains, like maize, soy and wheat.

The trend of investing heavily in good commodities was started by Goldman Sachs, in 1992, when it received approval from the Commodity Futures Trading Commission (CTFC), to exceed limits on investing in grain markets to market its commodity index, the GSCI.

One of the main reasons for the surge in food prices in 2008 is attributed to speculation. According to the data collected by the CTFC, in the US alone, more than $66.6 million has been invested in commodities like wheat and coffee.

However, after the food crisis of 2008, governments around the world have been trying to curb excessive speculation by trying to get banks to impose new limits. Though no other bank outside of Germany has set any restrictions on speculation over food commodity prices, hope that other banks may soon follow continues.

 

 

© 2015 Food World News. All rights reserved. Do not reproduce without permission.
Get the Most Popular Food Stories in a Weekly Newsletter
TrendingOn The Web
Food Biz
Chipotle - shuts down

Chipotle Head Towards Gaining Trust Of Customers

Chipote's meeting on Febraury 8th briefs employees on safety standards. Chipotle is doing everything possible to win back the customers.

Food Waste was one of the pressing matters discussed during the World Food Day Conference

French Supermarkets to donate unsold food to charities; Banned from throwing away food

Because of the alarming rate of food that are put to waste by the world's population today, the government of France has banned local supermarkets from throwing away unsold food and letting them rot.

Restaurant Week of D.C Extended Due to Snowfall

Restaurant Week of D.C Extended Due to Snowfall

Good news awaits for the food addicts in D.C and surrounding areas, who have been sad over not being able to enjoy the Restaurant Week. People will be able to enjoy the amazing yet cost – effective meals even in the beginning of February.

Food Tech
UberEats will be released March 2016

Uber News: UberEats is Coming to the US

The car service company is setting up to launch 'UberEATS', a stand alone app that will enable its users from Los Angeles, Chicago, New York, Austin, San Francisco, Washington D.C., Houston, Seattle and Dallas to utilize their food delivery service

Glass of Water

Charcoal Water: Its Health Benefits and What It Can Do For a Bloated Stomach

Now that juices and detox cleansing have become quite the norm, mixologists are itching to bring something new to the table. Enter: Activated charcoal.

Mobile Order and Pay

Starbucks Mobile App Hits 1M Mark, Mobile Order & Pay Sets New Milestone

Starbucks has reached another milestone after its newest technological innovation was launched. The coffee company giant has received and has processed 1 million orders from US customers through their mobile application.

Real Time Analytics