Surging food prices threaten Asians
By Kelvin Chan |
April 27, 2011, Wednesday
|
Print Edition
Print Edition
WORLD food prices that surged 30 percent in the first two months of the year threaten to push millions of Asians into extreme poverty and cut economic growth, the Asian Development Bank said yesterday.
The surging prices translated into domestic food inflation of 10 percent on average in many Asian economies, which could drive 64 million people into poverty, the ADB said in a report, adding that it will also erode the living standards of families already living in poverty.
Food prices have been driven higher by surging oil prices, production shortfalls due to bad weather and export restrictions by several food producing countries.
If higher food and oil prices persist for the rest of the year, they could shave as much as 1.5 percentage points from economic growth in developing Asian countries, the report said.
Some countries will be hit harder than others.
Singapore is highly vulnerable to inflation because the tiny city-state must import all its food. On the other hand, South Korea, where food accounts for a relatively small part of the consumer price index, will get off more lightly.
The rapid increases in the cost of food are a serious setback for the region that has rebounded rapidly from the global economic crisis.
Declining grain stocks, higher demand from Asian countries with big populations that are growing wealthier and a dwindling amount of agricultural land will continue to keep food prices high in the short term.
So will competition for food grains from biofuel production and stagnant or declining crop yields.
Drought in China's major wheat-producing belt and flooding in rice-producing regions of Asia have reduced supplies of those crops.
The surging prices translated into domestic food inflation of 10 percent on average in many Asian economies, which could drive 64 million people into poverty, the ADB said in a report, adding that it will also erode the living standards of families already living in poverty.
Food prices have been driven higher by surging oil prices, production shortfalls due to bad weather and export restrictions by several food producing countries.
If higher food and oil prices persist for the rest of the year, they could shave as much as 1.5 percentage points from economic growth in developing Asian countries, the report said.
Some countries will be hit harder than others.
Singapore is highly vulnerable to inflation because the tiny city-state must import all its food. On the other hand, South Korea, where food accounts for a relatively small part of the consumer price index, will get off more lightly.
The rapid increases in the cost of food are a serious setback for the region that has rebounded rapidly from the global economic crisis.
Declining grain stocks, higher demand from Asian countries with big populations that are growing wealthier and a dwindling amount of agricultural land will continue to keep food prices high in the short term.
So will competition for food grains from biofuel production and stagnant or declining crop yields.
Drought in China's major wheat-producing belt and flooding in rice-producing regions of Asia have reduced supplies of those crops.
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