LBBW withdraws from food speculation

After DekaBank (central asset manager of the German Savings Banks Organisation) announced its withdrawal from food speculation in April, the Landesbank Baden-Württemberg is now following suit. By the end of the year, the bank intends to discontinue all investment products related to agricultural commodities.

The Landesbank Baden-Württemberg (LBBW) is withdrawing from speculation in agricultural commodities. Yesterday the LBBW issued a press release stating its intention to “completely refrain from offering agricultural commodity investments” in the two funds “LBBW Rohstoffe 1” and “LBBW Rohstoffe 2 LS”. In April of this year, DekaBank announced its intention to rid its portfolio of all speculation in important agricultural commodities.

Volksbanken, Raiffeisenbanken and Deutsche Bank must follow suit

In October 2011 foodwatch called upon banks to abandon speculation in agricultural commodities. In its report “The Hunger-Makers”, foodwatch published ample evidence that such investments lead to actual increases in food prices and causes hunger in poor regions of the world. The LBBW has now become the second bank to take the only reasonable step and pull out of the irresponsible practice of gambling on hunger. The bank’s withdrawal also represents an important success for the foodwatch campaign. Now it’s time for Deutsche Bank and the cooperative banks of the Volksbanken and Raiffeisenbanken to follow suit.

However, foodwatch is criticising both LBBW and DekaBank for only discontinuing the speculation in agricultural commodities within their own fund products. Commodities funds from other banks will still be offered. Both banks are also planning to continue speculating on the development of oil prices. The price of oil has a direct influence on food prices through the costs for agricultural diesel and chemical fertilisers.

Playing for time: Deutsche Bank preparing study

With its campaign “Hände weg vom Acker, Mann!” (roughly translatable as “Hands off agriculture, Mr Ackermann”), foodwatch made a direct appeal to Deutsche Bank, as the largest German investment bank, calling for its withdrawal from speculation in agricultural commodities. More than 63,000 people demonstrated their support for this demand by sending a protest email. Deutsche Bank reacted: for the time being, no new exchange-traded investment products based on agricultural commodities would be issued, and the bank intended to release a report by the end of the year on the impact of its investments on food prices. However, in the time it is taking Deutsche Bank to prepare its report, more people in the world’s poorest countries are going hungry – owing in part to the trading practices of Deutsche Bank.

foodwatch says: DekaBank and LBBW have demonstrated how it can be done: no long studies and no delayed decisions, but instead an immediate withdrawal from food speculation in response to the wealth of evidence for its harmfulness.