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BEGINNING OR THE END?
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AseanAffairs Magazine March - April 2011
CONTENT • ASEAN TECH
• ASEAN CORPORATE STRATEGY • ASEAN TRAVELLER
• ASEAN ENERGY

• BEYOND ASEAN

• ASEAN ENVIRONMENT INSIDE OUT
• ASEAN MONEY  • THE AWAKENING
 • ASEAN TALK      • SAVE OUR PLANET IV

 

 

A NEW REALIGNMENT or CONTINUING CHAOS?
Managing Editor David Swartzentruber sees a new global political restructuring as the answer to the current global chaos.


COVER STORY   Read More... 

Testimonials – What our Readers are saying about us
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By Rajiv Biswas
   FOOD SECURITY IN ASEAN

With world food prices soaring in early 2011, Rajiv Bi swas and Danika Biswas examine the risks facing Asean.


Droughts in China and Western Australia have lowered tha world supply of grain.

“There are people in the world so hungry, that God cannot appear to them except in the form of bread.”- Mahatma Gandhi.

 At the World Economic Forum held in Davos in January 2011, government and business leaders identified food security and rising global food prices as one of the key risks facing the world in 2011. Even as leaders discussed these issues, dramatic political upheaval was taking place in the Middle East, as popular uprisings in Tunisia and Egypt gained momentum. These political revolutions were triggered in part by the rapid escalation in staple food prices for key cereals, albeit just one of the many contributing factors to the turmoil.

THE RISE IN GLOBAL FOOD PRICES With global food prices continuing to soar in early 2011 due to a number of supplyside shocks to key agricultural commodities, world agricultural commodity prices are again approaching their 2008 peak. For Asean countries, this again highlights risks and vulnerabilities related to food security, only three years after the food crisis in 2008 caused by escalating rice prices.

Despite being the world’s fastest growing economic region, developing Asia remains highly vulnerable to the impact of rising food prices. In 2009, estimates by the Food and Agriculture Organization of the United Nations indicated that 60 million Asians had joined the ranks of the undernourished due to surging world food prices, with a total of around 640 million Asians estimated to be undernourished that year.

The current rise in world food prices reflects a number of supply-side shocks for key agricultural commodities. The severe Russian drought in 2010 pushed up world grain prices sharply, with drought conditions in a number of key Chinese wheat-growing regions in early 2011 also raising concerns that China may need to import significant quantities of grain in 2011 to rebuild buffer stocks. In stark contrast, the floods in Australia have destroyed much of the sugar cane crop in Queensland, which has also pushed up world sugar prices. Political risk is also a factor in some countries, with a civil war in the Ivory Coast, a key cocoa-exporting country, having disrupted its cocoa exports. Other major commodities that have experienced large price rises include cotton and palm oil.  
While the latest run-up in agricultural food prices reflects cyclical supply-side factors, there are strong underlying structural demand factors which also may be building over the medium term that will drive agricultural commodity prices higher. The rapid growth of populous Asian economies such as China, India and Indonesia is resulting in strong growth in per capita incomes per person in developing Asia. As households graduate from low-income to middle-incomes, consumption of food products is expected to rise rapidly, resulting in underlying upward pressures on many commodity prices.
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