August 10 2012 - Commenting on reports that Germany’s second largest bank has excluded food commodities from its commodity index fund, Christian Aid’s Senior Economic Justice Adviser Joseph Stead gave the move a warm welcome.
‘We’re extremely encouraged by the news that Commerzbank has decided to stop selling investments in commodity index funds which include food – and we urge other companies to follow suit,’ he said.
‘While there is no absolute proof that such investments are fuelling the food price rises which leave more families suffering the agony of hunger, the evidence we have strongly suggests that they are.
‘Given that almost one billion people around the world already struggle with hunger and that climate change, conflict and many other pressures are already pushing global food prices even higher than they are today, it’s time for other investment managers to err on the side of caution.
‘They should exclude food from their commodity index funds; otherwise, they are very likely to be profiting at the expense of countless poor people’s lives.
‘Sunday’s Global Hunger Event in London, at the end of the Olympics, should help to concentrate fund managers’ minds on whether they are part of the scandal of nearly a billion people not having enough to eat.’
Christian Aid highlighted the risk that commodity index funds’ investments in food commodities could be pushing global prices higher more than a year ago, in its report Hungry for Justice.
The report warned that the pension funds and other institutional investors which have poured billions into commodity index funds could be unwittingly exacerbating global hunger.
Such funds only attracted huge inflows of money after 2000, when financial market deregulation in the US allowed pension funds and other non-traditional investors to start using them.
Hungry for Justice called on regulators to launch an investigation of how that deregulation had affected global food prices. It also said governments should assess the likely impact on poorer countries of laws such as that in the US, which triggered the commodity index fund cash influx, before legislation is passed.
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Notes to Editors:
1. Christian Aid works in some of the world's poorest communities in nearly 50 countries. We act where the need is greatest, regardless of religion, helping people build the lives they deserve.
2. Christian Aid has a vision, an end to global poverty, and we believe that vision can become a reality. Our report, Poverty Over, explains what we believe needs to be done – and can be done – to end poverty. Details at http://www.christianaid.org.uk/Images/poverty-over-report.pdf
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