Germany's Commerzbank has removed agricultural products from a commodity index fund after accusations that speculation has pushed up food prices and fuelled unrest in some poor countries.

Commerzbank followed at least two other German banks in restricting investments in agriculture, while most banks and fund managers have defended investment in commodities, saying that price jumps have been due to heavy demand and shortages.

Germany's second-largest bank declined to give details about the reason for its decision to remove agricultural commodities from an exchange-traded fund (ETF), but German lobby group Foodwatch said the decision was because of ethical concerns.

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"Commerzbank is reacting to the debate about a series of studies which show that investment in this type of commodity fund pushes food prices upwards and so contributes to the hunger crisis in many parts of the world," Foodwatch said.

Agriculture has been removed from the ComStage ETF CB Commodity EW Index TR, a Commerzbank spokeswoman said, declining to elaborate.

The fund, which has assets of $145.1-million (U.S.), was restructured on July 30 and now contains 12 metals and energy commodities, Commerzbank said on its website.

"I think that more and more investors are sensitive to banks' exposure to agriculture. In the last 12 months there's been lots of discussion about ethical investment," said David Bicchetti, economics affairs officer at the United Nations Conference on Trade and Development.

In March, Germany's largest bank, Deutsche Bank, said it would not issue new investment products in agricultural commodities this year while it researches the impact of investment in commodities on food prices.

DekaBank, which is owned by the German savings banks, said in April it was pulling out of investing in basic food stuffs, such as wheat, soy, maize and meat.

A drought in the United States, which is the worst to hit the Midwest in 56 years, pushed up corn prices by almost 23 per cent in July.

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"The poor U.S. harvest, but also outside speculation, have played a role in the price rises," said Foodwatch spokesman Martin Ruecker.

The surge in grain prices and a series of investment bank trading scandals have stirred up debate over whether investors – including institutions such as pension funds – are responsible for inflating food prices because they have been buying raw materials mainly through bank-backed commodity index funds.

In the United States, these typically passive investors have plowed some $200-billion of net investment into commodity futures markets over the past decade or so, more than a third of that in agricultural contracts such as wheat and coffee, according to Commodity Futures Trading Commission data.

But the trend dates back to 1992, when Goldman Sachs received approval from the CFTC to exceed limits on investing in grain markets to market its commodity index, the GSCI.

After the 2008 spike in prices, however, politicians clamoured for new limits on excessive speculation across all commodity markets. New "position limits" rules, approved late last year, will cap passive investment in the biggest indexes.

The GSCI, now owned by Standard & Poor's, and the Dow Jones-UBS indexes are by far the largest such commodity baskets, with over $80-billion tracking each of those products. Both include agricultural commodities.

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Goldman Sachs on Thursday forecast that corn, soybean and wheat prices would go even higher over the next three months due to the severity of the U.S. drought. In the same note, Goldman advised its clients to lock in current prices and buy upside options in anticipation of the higher prices it was forecasting.

Banks outside of Germany have not joined the move to curb investment in agriculture, despite heavy lobbying by groups such as the U.K.'s World Development Movement for strict regulation on speculation in commodities.

"It's great that Commerzbank has decided to pull out, but I wouldn't want to wait for a voluntary approach from banks," said Amy Horton, food campaigner at WDM.

"In the U.K., there's been a spate of scandals over the last few months, and banks still think they can act with impunity. We need regulators to set standards."

The UN's food agency on Thursday reported a surge in global food prices in July and said the world could face a food crisis of the kind seen in 2007-08 if countries restrict exports.

Soaring grain futures markets and restrictive export policies pushed up prices of food in 2007-08, sparking violent protests in countries including Egypt, Cameroon and Haiti.