Potato sacks with painted dollar signs, red-and-white security tape and a Wheel of Fortune-style cardboard disc that has "Allianz Casino" written on it. Those were the visual aids supporters of the charity Oxfam used in their protest last week(07.05.2013) in Munich, just before the annual shareholder's meeting of German insurer, Allianz.

Oxfam accuses Allianz of running a game of what it called "hunger roulette." That is also the title of a study that the charity recently published in which it sharply criticizes Allianz's business practices and those of other German corporate giants, like Deutsche Bank.

The study's main theme: These institutions increase the ups and downs of food prices with their speculation. Banks, hedge funds and institutional investors can bet on the price development of foodstuffs, like wheat, corn or soy, via agricultural commodity funds. It's a billion-dollar business. Oxfam estimates that roughly 11 billion euros (14 billion dollars) in the German market have been invested in speculations related to food, 6.2 billion euros of which came through Allianz.

Oxfam's "Hunger Roulette" protest in Munich

"From our point of view there are many findings that point to speculation being another factor in these waves of long-term price fluctuations. It gives the curve higher peaks and lower valleys," says David Hachfeld, a trade expert at Oxfam and author of the study. Other aid organizations, like Foodwatch, have also denounced commodity speculation.

Price increases of 300 percent

Enormous price increases are already occurring all over the world. In Ethiopia, corn prices rose by almost 200 percent. The cost of wheat went up 300 percent in Somalia and became 90 percent more expensive in Sudan. The consequences are brutal, especially in poorer parts of the world, where people spend up to 80 percent of their income on food. A few cents more for a bag of grain can cause a crisis of life-or-death proportions.

Today there are roughly 870 Million people in the world who go to bed hungry, according to the United Nations. Women and children are hit especially hard. Unnaturally low prices are also bad, because they can destroy the market and ruin the farmers.

Allianz does not believe, however, that they are responsible for the extreme price fluctuations. On the contrary: "We advise our customers to invest anti-cyclical. And looking at our clients' investment behavior, you can see that they buy when prices fall and sell when prices rise," notes Nicolai Tewes, Senior Vice President Corporate Affairs, at Allianz.

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This has a "regulatory effect on prices" in the free market, according to Tewes. Michael Diekmann, head of the company, also rejected the accusations on Tuesday. On the derivatives market, traders speculate on the risk of future price changes and not on commodities, Tewes claims. "That's how farmers guard against too low prices, and buyers against too high ones," he says.

Contested research

Allianz and other institutions are supported in their claims by economic ethicist Ingo Pies, who has evaluated 30 studies on the topic from 2010 to 2012. The tenor of his research: The main responsibility for the rise in prices depends on other factors, like a higher demand for meat, or bio-fuels.

But the paper has drawn severe criticism. Heiner Flassbeck, head economist of the United Nations Conference on Trade and Development (UNCTAD), accuses Pies of being wrong. And the head of Foodwatch, Thilo Bode, said that the choice of studies was too one-sided.

Charities, like Oxfam and the German Misereor, also stated that equivalent studies were one-sided and delivered so-called "myths of innocence." When an existential issue, like hunger, is on the table, financial institutions should have to prove that their investment options aren't harmful, Misereor director Martin Bröckelmann-Simon argues.

Regulating the market

Despite conflicting arguments on agricultural speculation, many banks have decided to exit the controversial business. In Germany, the state banks of Baden-Württemberg and Berlin, Commerzbank and Deka Bank have already pulled out. The DZ Bank and fund provider Union Investment are said to be letting their involvement expire. But that's not enough for Oxfam's trade expert David Hachfeld: "We want to see politics return to regulating the markets in an appropriate way."