Thursday, August 09, 2012

German Banks Take Food Off Commodities Exchange

Do banks actually have a conscience?   A few German banks apparently do.

Germany's Commerzbank, the country's second-largest, has removed agricultural products (food) from its commodities index fund, following similar moves by two other German banks including the country's largest, Deutsche Bank.

Germany's second-largest bank declined to give details about the reason for its decision to remove agricultural commodities from an exchange-traded fund (ETF), but German lobby group Foodwatch said the decision was because of 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 said.

Agriculture has been removed from the ComStage ETF CB Commodity EW Index TR, a Commerzbank spokeswoman said, declining to elaborate.

The fund, which has assets of $145.1 million, was restructured on July 30 and now contains 12 metals and energy commodities, Commerzbank said on its website.

"I think that more and more investors are sensitive to banks' exposure to agriculture. In the last 12 months there's been lots of discussion about ethical investment," said David Bicchetti, economics affairs officer at the United Nations Conference on Trade and Development (UNCTAD).

In March, Germany's largest bank, Deutsche 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.

The food commodities desk is said to be the largest operated by Goldman Sachs.

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