* Left-wing party pushes for change to constitution
* Political scrutiny of commodities sector rising
* Industry body GTSA says proposal is misguided
By Emma Farge
GENEVA, Oct 1 (Reuters) - Switzerland is obliged to hold avote on banning speculation in agricultural commodities after aleft wing political initiative gained enough signatures to forceit to under Swiss law.
The timing of the national vote is not clear and is pendingofficial guidance from the government. Under the Swiss system,parliament can propose alternative legislation which istypically more moderate and also subject to a national vote.
The sector is worth $20 billion to Switzerland, which haswelcomed the world's top trading companies and manyinternational banks to its cantons, but it is unclear how much apopular reaction can rein them in.
German banks like Commerzbank and DekaBank have already cut investment in agriculture afterpressure from non-governmental organisations. Rothschild, whichhas a wealth management business in Switzerland, said it waspulling out of livestock and soft commodities.
Those in the industry played down any possible impact, sayingthe trade was too international to suffer, and the maincommodities-trading exchanges are not Swiss.
Switzerland'a Young Socialist party, which launched theproposal last year, said it had collected more than the 100,000signatures required in Switzerland for a vote to change theconstitution.
The exact size of investment in agricultural commoditiesfrom wealth management hub Switzerland is unclear although theproposal, entitled "No Speculation on Food Commodities", wouldaffect companies with a subsidiary in Switzerland, even if theirheadquarters are elsewhere, according to the proposal.
It would also apply to firms investing in agriculturalcommodities for themselves or on behalf of clients, it showed.
"We're concerned that prices are moving based on factorsthat have nothing to do with the real market," David Roth, headof the Young Socialist Party, said on Tuesday.
The Swiss direct democratic system usually has severalnational referendums a year, meaning that public ire can betranslated into strong action.
Some see the proposal's success as the latest indication ofSwitzerland's growing disquiet about it commodities sector whichthey say is not subject to enough national regulation.
"The collection of 130,000 signatures in less than a yearshows clearly the growing unease of Swiss citizens over businesspractices in the financial and the commodity sector," saidOliver Classen of Swiss NGO Berne Declaration which campaignsfor greater oversight.
Swiss government records show that politicians havesubmitted more than twenty parliamentary requests on thecommodities sector since the start of last year on topicsranging from oil-related corruption scandals in Nigeria to taxplanning for commodity traders.
Stephane Graber, secretary general of industry body theGeneva Trading and Shipping Association, said that he did notexpect the latest proposal on food speculation to have muchimpact on Swiss companies.
"We don't see this as really changing anything since theagricultural exchanges are not here in Switzerland," he said atan industry conference last week.
"It's political and done without a good understanding of thefunctioning of the markets," he added.
Switzerland's Cabinet is also considering a motion for a lawon transparency rules that would go beyond those in the U.S. andEU by explicitly targeting unlisted trading houses for the firsttime.
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