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Deutsche Bank reduces 'hunger trade'

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Deutsche Bank reduces 'hunger trade'
Photo: DPA
09:25 CET+01:00
Germany's biggest bank, Deutsche Bank, says it will slow its food-price betting business after almost admitting trade in staple foods was linked to higher food prices and the growing number of hungry people.

"We recognise that the proper functioning of agricultural markets (has) wide social ramifications," the bank said in its annual social responsibility report.

It said it was "concerned by the growing number of people who find themselves in food poverty."

Activists have been protesting against "commodity index funds" by Deutsche Bank and Goldman Sachs saying they are key culprits in the volatility of food prices around the world.

Other German banks known to bet on food prices are Commerzbank and, to a lesser extent, Sparkasse.

The funds enable banks to effectively bet on the development of food prices - and are held responsible for the sharp rise in food prices since 2008.

Deutsche Bank said on Tuesday it would not launch investment products this year dealing in staple food commodities and look more closely at any link with increased hunger.

In response to Deutsche Bank's announcement, Matthias Wolfschmidt, deputy director of the German NGO Foodwatch, called on the bank to renounce its existing food community products and pledge a lasting ban.

The group of 20 industrial and developing nations pledged last year to take action on rampant food price inflation and curb the influence of speculative investors.

"We agree with international policy makers that transparency in agricultural commodity derivatives markets should be enhanced and measures to avoid misconduct strengthened," Deutsche Bank said in its report.

But it argued that other factors were also behind rising prices of crucial staples including growing demand, trade restrictions and state subsidies.

AFP/jcw

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