HONG KONG: World food prices that surged 30 per cent 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 per cent on average in many Asian economies, which could drive 64 million people into poverty, the bank said, adding that it would also erode the living standards of poor families. Food prices have been driven higher by surging oil prices, production shortfalls due to bad weather and export restrictions by 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, which rebounded rapidly from the global economic crisis.
ADB chief economist Changyong Rhee said food export bans and other short-term measures should be avoided. Instead, he urged greater spending to boost agricultural productivity and more investment to improve irrigation, food storage and other infrastructure.Poor families in Asia are hit much harder by food price inflation because they spend as much as 60 per cent of their income on food, a much higher proportion than in developed countries.
Asia’s developing countries are home to two-thirds of the world’s poor (about 600 million people), who live on US$1.25 (RM3.60) a day or less. In contrast, people in the United States and other wealthy countries spend about 15 per cent of their income on food, so the impact on rising food prices on their wallets isn’t as big.
Global food prices jumped 34.2 per cent in February over a year ago following a 28.4 per cent rise in January, according to the Food and Agriculture Organisation’s benchmark index. The organisation said 29 countries in Africa, Asia, Middle East and Latin America and the Caribbean would need food aid. Cambodia and Laos face unfavourable prospects for crops due to delayed and erratic rains.In Kuala Lumpur, the Domestic Trade, Cooperatives and Consumerism Ministr y advised Malaysians to be prepared for rising food costs due to the global food crisis.
Deputy Minister Datuk Tan Lian Hoe said Malaysians needed to accept this reality, but said any restructuring of food subsidies would be done in stages.
gambar hiasan : ihsan dari leomadrigal
“This is necessary as the government needs to ensure that specific groups can afford food and other items.” Surging global prices translated into a rise of 2.8 per cent in the consumer price index for January to March compared with the same period last year. The indexes for food and non-alcoholic beverages, and non-food sectors for last month increased by 4.7 and 2.3 per cent compared with the same month last year.
Wednesday, April 27, 2011
Food Prices surged - Beware Malaysian
Posted by Ali Aizuddin Razali at 7:39 AM