ASEAN KEY DESTINATIONS
High food prices threaten Asia
Surging food prices in India are forcing families to cut back on meat and vegetables. In Indonesia, they prompted the president to urge people to grow their own chili peppers. And in China, restaurant owners are feeling the squeeze.
Inflation is climbing across Asia as the cost of food jumps, echoing the previous global food crisis that peaked in 2008.
While people in the U.S. and other wealthy Western nations will barely feel the effects of higher prices, getting enough to eat is a big challenge for millions in Asia. Poor families typically spend more than half their household income on food and are bearing the brunt.
On Tuesday, the World Bank said in a report that global food prices have hit "dangerous levels" that could contribute to political instability, push millions of people into poverty and raise the cost of groceries.
The report said global food prices have jumped 29 percent in the past year, and are just 3 percent below the all-time peak hit in 2008.
Bank President Robert Zoellick said the rising prices have hit people hardest in the developing world because they spend as much as half their income on food.
The World Bank estimates higher prices for corn, wheat and oil have pushed 44 million people into extreme poverty since last June.
The report comes a day before finance ministers and central bank chiefs from the Group of 20 leading economies meet in Paris. Zoellick said he's worried some countries might react to food inflation by banning exports or implementing price controls, which would just aggravate the problem.
Wary of potential unrest, Asian governments are trying to keep food price inflation from spilling into the rest of the economy. Officials face a tough dilemma as they raise interest rates to dampen inflation. Too fast and it will choke off economic growth, too slow and the problem could spiral out of control.
The UN Food and Agriculture Organization says food costs have reached an historic high but recent good harvests are staving off the kind of food emergency felt in 2008, when shortages and skyrocketing prices caused riots in poor nations.
Other experts fear that the worst is not over yet. Inflation in Indonesia powered to 7 percent in January and 8.2 percent in India - where the cost of vegetables skyrocketed by almost two thirds - while in China it was near a 28-month high as food costs jumped more than 10 percent.
Analysts say Chinese inflation will head still higher in coming months because the government cannot quickly increase food supplies.
Huge swings in prices are characteristic of the latest bout of food inflation. In Indonesia, the price of chili peppers vaulted as much as 10-fold in recent months due to heavy rainfall that decimated crops.
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.
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