European banks are withdrawing vehicles that allow investors to speculate on food prices due to reputational concerns amid pressure from campaigners and politicians.
Volksbanken of Austria yesterday became the fifth European bank to announce that it was either discontinuing investment funds linked to food commodities or ceasing to issue new ones. German banks Deutsche Bank, Commerzbank, DekaBank and Landesbank Baden-Württemberg have announced similar measures.
The retreat, which comes after corn and soyabean prices surged to all-time highs on the back of the worst drought in the US farm belt in half a century, is a rare victory for campaigners such as Germany-based Food Watch, Oxfam and the World Development Movement and some lawmakers in continental Europe.