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Tuesday, 06 May 2014

Deutsche Bank clashes with NGOs over food speculation

EurActiv Germany reports that NGOs and investors are at odds over the effects of food speculation, causing the European Parliament to propose limiting direct stakeholder purchases, and Deutsche Bank to cover its tracks amid "a flood of accusations."
Deutsche Bank does not want to draw any conclusions regarding the correlation between its business policy, and the risk of food price speculation. But this is precisely the accusation coming from numerous NGOs, after a meeting with representatives on Wednesday (16 April) in Frankfurt.
"Neither could Deutsche Bank weaken the argument that their financial products contribute to price increases in food products, nor could it finally rule out connections to hunger," criticised the NGO Foodwatch, which was invited to the meeting.
Similar to Oxfam and the German aid organisation Welthungerhilfe, Foodwatch believes that bets on changing prices for corn, soy or wheat are responsible for global hunger. Speculation drives prices for food products up, Foodwatch said, to the detriment of the poorest consumers.
But the details of the accusations cannot be analysed, as the conference of experts took place behind closed doors and the content of the debate is confidential.
Nevertheless, it is clear that the accused see the situation differently.
"Reacting to a flood of accusations", Deutsche Bank claimed its own activities in the food sector were put under particular scrutiny, and the factors for rising food prices were analysed and evaluated.
According to these, the conclusion was made that rising prices should be attributed to increased demand due to global population growth. And short-term price variations are also not necessarily the result of speculation. They are just as subject to weather-related production failures and politics as well as oil prices and changing exchange rates, Deutsche Bank said its findings indicate.
As a matter of fact, scholars themselves are divided over the extent to which speculation affects food prices, said Wolfgang Jamann who is secretary-general at Welthungerhilfe. But, he said, because the consequences for "starving smallholders" can be potentially fatal, it is not morally acceptable to bet on rising or falling food prices in the interest of short-term profits.

Source: Euractiv