Asia’s food prices have hit “dangerous levels”

In India, people are taking to the streets as prices of onions, a staple in their everyday diet, bring tears to their eyes.
In the Philippines, lawmakers are considering granting President Benigno Aquino III emergency powers to address food price hikes fuelled by increases in the cost of fuel.
In Indonesia, the government is urging people to grow their own chili peppers while some farmers have taken to arming themselves with machetes to guard their fields from chili rustlers
In China, the worst drought in six decades is putting pressure on global wheat prices as Beijing announces $1 billion in spending to alleviate the problem with emergency irrigation and cloud-seeding to make rain.
Getting enough to eat today has become a big challenge for tens of millions in Asia as governments across the continent are battling rising food costs that are threatening to spiral out of control in some of the countries.
The World Bank says global food prices have hit “dangerous levels” after jumping 29 per cent overall in the past year. It estimates costlier corn, wheat — and oil — have pushed 44 million people into extreme poverty since June.
The UN’s Food and Agriculture Organization says food costs have reached an historic high while experts fear that the worst is not over yet.
“Just three years after the terrifying food crisis of 2007-2009, prices of the most important commodity of all are skyrocketing,” economists at global bank Credit Suisse wrote in a report on food price inflation.
“Asian inflation is amongst the most sensitive in the world to food price shocks and, despite the likely introduction of further food subsidies and other price controls, we have yet to reach the high water mark of the latest one.”
‘Global food prices are now at dangerous levels. It is already clear recent price rises for food are causing pain and suffering to poor people around the globe,’ said World Bank President Robert Zoellick.
While the root causes of food price inflation are hotly debated, with differing explanations, one common factor is extreme weather events that are occurring more frequently, wiping out crops. Floods in Australia, Pakistan and India have helped force up food prices, as have droughts in China, Argentina and Eastern Europe.
Asia’s growing middle classes are also raising demand for food, as people with more income seek out meals with more variety. Economists say higher energy prices also play a role, not only through higher transport and fertilizer costs, but also by encouraging farmers to use more of their land to grow crops for biofuels, analysts said.
“I stopped buying meat for my family as onion was a major ingredient in its cooking. My family shifted to eating seasonal vegetables, which cost much less,” said Rajesh Kumar, a government clerk, with a wife and three children to look after, who joined 25,000 others in a massive protest march in Delhi recently.
Worried over the frequent “unacceptable” rise in food prices, the Indian government has unveiled a slew of anti-inflation steps, including regulating exports and imports, sale of onions through government agencies, utilising state-run companies to source pulses and stringent action against hoarders.
“Prices of most manufactured goods and services have been reasonably stable, food prices have frequently risen at unacceptable rates,” the Prime Minister’s Office (PMO) said in a statement.
The government has been on the backfoot after opposition parties raked up the issue of price rise in rallies across the country. India’s food inflation has soared to over 18 percent.
It warned of severe action against black marketers and hoarders of food items.
“The only lasting solution to food price inflation lies in increasing agricultural productivity,” the statement added. It also said there was a need for facilities like cold storages to improve the supply chain of perishables like milk and meat and that this would help bring down prices of such items.
India’s government is also preparing to gradually open its massive and fast-growing retail market to foreign supermarket chains such as Wal-Mart, in the hope that their investment and expertise can deliver lower food prices to consumers and a better deal to farmers.
In Indonesia, the price of chili peppers vaulted as much as 10-fold in recent months due to heavy rainfall that decimated crops. Some farmers took to arming themselves with machetes to guard their fields from chili rustlers and even President Susilo Bambang Yudhoyono weighed in, urging people to grow the spicy staple in their own backyards.
Prices for red and green chili peppers, or “cabai rawit,” have been volatile, rocketing to $22.20 per kilogram, 10 times their normal price, for several days in January before levelling off at around $10-$11 a kilo. Even at that price, it’s still more expensive than beef.
In Singapore, consumer prices rose 5.5% in January from a year earlier, versus a 4.6% increase in December, the Department of Statistics said in a statement. The increase, which was far greater than analysts expected, was driven partly by increases in transportation and housing costs, and reflected growing evidence that the rich city-state’s economy is bumping up against capacity constraints after years of rapid expansion.
Philippine Senator Francis Pangilinan, chairman of the Senate Committee on Agriculture and Food is seeking an inquiry into the apparent “sudden” increase in food prices and other agricultural products
He said he will not oppose moves to grant President Benigno Aquino III emergency powers to address oil price hikes and the subsequent increases in the prices of food and basic commodities as a result of political upheaval in the Middle East.
“If the situation warrants it we will support such powers. No one anticipated the turn of events in the Middle East, and considering that some one million of our countrymen are based there,” he said.
The only silver lining in the dark cloud of food prices seems to be in rice.
In recent months, international prices for rice -- the food staple for more than 3 billion people living in South and East Asia -- have seen only modest increases.
“If you compare the rice price to other commodities such as wheat and corn, the increase has been minimal, up less than 20 per cent over the past year,” said Chookiat Ophaswongse, honorary advisor to the Thai Rice Exporters Association.
Thailand is the world’s largest rice exporter, shipping about 9 million tons of the grain a year.
More importantly, both India and China have plenty of rice in their stockpiles, and have essentially been out of the international rice markets since 2008.
Their absence from the world market has been good for rice price stability.
“China’s and India’s combined population is in the order of 2.5 billion people,” said Food and Agriculture Organization policy officer Sumiter Broca Broca. “If these countries were to enter the international food market in a big way there would be chaos.”