Singaporean housewife Nursiah Sabada could only shrug in
resignation as she shopped for food ahead of the holiday weekend
marking the end of the Muslim fasting month of Ramadan.
"It's the same price being quoted everywhere, and I don't have
much choice because of the festive season," she told AFP after
purchasing three kilograms (6.6 pounds) of beef for the Eid al-Fitr
celebrations.
She was not alone in feeling the pinch, and the rise in beef
prices in import-dependent Singapore had little to do with the
festival itself.
Millions of Asians like Nursiah are spending more to put food on
the table as a result of supply disruptions from floods and
drought, while changing patterns of consumption are expected to put
long-term pressure on prices.
The UN Food and Agriculture Organisation (FAO) will hold a
special one-day meeting to discuss rising world prices in Rome on
September 24.
While analysts say the situation is less severe than the one
experienced in Asia in 2008, when soaring food costs triggered
social unrest in poorer parts of the region, chances of prices
easing anytime soon are remote.
"In the immediate future, it's not going to go up to what we saw
in 2008 but the trend is of course on the upside," said Shikha Jha,
principal economist with the Manila-based Asian Development
Bank.
Erratic weather patterns, better nutrition amid rising affluence
and shrinking supply of arable land are seen as the main factors
behind the rising food costs.
"We expect another multi-year food price rise, partly because of
burgeoning demand from the world's rapidly developing and most
populated economies where diets are changing towards a higher
calorie intake," Nomura analysts said.
"The supply side of the food equation is being constrained by
diminishing agricultural productivity gains and competing use of
available land due to rising trends of urbanization and
industrialization," they said in a report.
The FAO's food price index in August reached its highest level
since September 2008, rising by five percent to an average of 176
points with the spike caused mainly by drought-hit Russia's
restrictions on wheat exports.
Kevin Grice, a London-based economist with Capital Economics,
said consumers in Asia's poorer economies would feel the pain more
acutely.
"I think probably the most vulnerable would be Thailand, India
and the Philippines," Grice said.
Devastating floods in Pakistan have sent prices soaring with
inflation set to hit 20 percent, and wiped out 80 percent of
farmers' wheat stock and seeds in breadbasket provinces such as
Sindh and Punjab, according to the government.
Major floods have also affected China's agricultural output with
food prices up an annual 6.8 percent in July after rising 5.5
percent on-year in the first six months of 2010, the latest
official data show.
In India, food inflation rose 11.47 percent year-on-year in the
week to August 28 compared with 10.86 percent in the previous
week.
Indians saw food prices rise by nearly 18 percent last year
after the worst monsoon rains in three decades hit farming output,
sparking protests and fiery parliamentary debates.
Food prices in the Philippines, which has a sizeable
agricultural sector, are also on the up with sugar particularly
affected.
Blaming "irregular weather", Roberto Amore of the Chamber of
Commerce and Industry said: "Areas that need a lot of water for
irrigation don't have water. Areas that need less water have a lot
of water, they are inundated."
In Malaysia, the government has introduced price controls on 18
items including chicken, eggs, some vegetables and fish, but
shoppers complain they are not working.
"Consumers are angry. How can you (say you) control prices when
all the basic grocery necessities have gone up?" said Siti Nora
Abdul Manaf, a 50-year-old housewife who lives just outside Kuala
Lumpur.
But in Indonesia at least, a stronger rupiah has shielded
consumers from sharply higher agricultural prices, economists
said.
"If the rupiah weakens, then there could be a problem here,"
Sucorinvest Central Gani analyst Gifar Indra Sakti said.
But food prices are relatively stable and the government is
"unlikely to introduce any price controls or stockpiling" for now,
he said. "There's no need for Indonesian consumers to panic."
Source:
AFP, Taken from Yahoo News.
http://sg.finance.yahoo.com/news/Rising-food-prices-pinch-afpsg-3751551126.html?x=0