News / Asia

Economists Warn Higher Oil Prices Will Worsen Asia's Food Inflation

Central Illinois farmer Bob Hogan climbs back into his combine while harvesting soybeans in Pawnee, Illinois, October 7, 2010 (file photo)
Central Illinois farmer Bob Hogan climbs back into his combine while harvesting soybeans in Pawnee, Illinois, October 7, 2010 (file photo)
Ron Corben

Global oil prices have spiked in recent days in response to political instability in the Middle East and North Africa. 

Asia's export-driven economies, dependent on imported oil, are bracing for higher inflation as global oil price tops $100 a barrel.

Aynul Hasan, a senior economist at the United Nations Economic and Social Commission Asia Pacific, says oil prices now depend on how the political turmoil unfolds in the Middle East.

"High oil prices very much depend on how soon things will settle down," Hasan explained.  "Obviously in this uncertainty there will be short-term disruption. Many countries have the buffer stock which can carry on for a few weeks. But if this carries on for longer, then definitely this will have an impact. Let's hope that this is not the case."

Hasan says oil costs could accelerate the rise in food prices, caused by poor crops in some areas and rising demand in many countries.

The World Bank has warned that food prices are dangerously high and seem set to continue rising. The higher prices already are affecting millions of Asia's poor. World Bank and UNESCAP economists predict more people will fall into poverty due to higher food costs in the coming year.

Supavud Saicheua, an economist with Thai stock brokering house Phatra Securities, says Asia's economic growth - largely dependent on exports - is vulnerable to sharp increases in oil prices.

"If you argue that the high oil price is primarily supply shock because of concern about Libya and other oil producing countries unable to produce, then that's very bad because if you have global slowdown and high oil prices then, it will hit Thailand and the rest of the region very hard," said Saicheua.

Most Asian countries are net importers of oil, including the manufacturing powerhouse China.

In July 2007, the aviation industry was hard hit when oil prices reached a record $147 a barrel. Then the global economic slump in 2008 led to sharp declines in passenger traffic and more losses for the industry. Airline shares have fallen in recent days as investors feared aviation profits may soon drop again.

Supavud says the oil commodity futures market expects at least six months of uncertainty before the market returns to normal.

World oil demand amounts to around 90 million barrels a day.  Libya contributes about one million barrels.

Higher food prices and poor economic conditions have contributed the discontent of many of the protesters across the Middle East. In East Asia, many governments are on the watch for inflation and have taken steps such as raising interest rates and curtailing capital inflows to tamp it down.

You May Like

N. Korea Sentences American to 6 Years Hard Labor

Matthew Miller's brief trial Sunday comes two weeks after 24-year old Miller and two other American detainees appealed to the US government to help free them More

Pakistan Rejects Afghan Criticism of 480-kilometer Border Trench

Military spokesman tells VOA the project is part of administrative and security measures taken to secure the mountainous border with Afghanistan More

Photogallery Typhoon Kalmaegi Makes Landfall in Philippines

Storm makes landfall late Sunday, cutting power and communications lines and forcing people to flee to higher ground More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Scotland Independence Bid Stokes Global Interesti
X
Henry Ridgwell
September 12, 2014 8:35 PM
The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Washington DC Mural Artists Help Beautify City

Like many cities, Washington has a graffiti problem. Buildings and homes, especially in low-income neighborhoods, are often targets of illegal artwork. But as we hear from VOA’s Julie Taboh, officials in the nation's capital have come up with an innovative program that uses the talents of local artists to beautify the city.
Video

Video Palestinians Turn to Rebuilding Gaza

After almost two months of conflict in Gaza, Palestinians are preparing to rebuild the isolated Mediterranean enclave with assistance from abroad. Meanwhile, an international human rights group has found that Israel likely violated international laws of war during some of its attacks on Gaza. Zlatica Hoke has more.
Video

Video US Muslim Leaders Condemn Islamic State

Leaders of America's Muslim community are condemning the violent extremism of the Islamic State group in Iraq and Syria. The U.S. Muslim leaders say militants are exploiting their faith in a failed effort to justify violent extremism. VOA correspondent Meredith Buel reports.
Video

Video Middle Eastern Church Leaders Highlight Christians’ Plight

Patriarchs of Eastern Rite churches came to Washington this week to draw attention to the attacks against Christians in Syria, Iraq and elsewhere in the Middle East. VOA’s religion correspondent Jerome Socolovsky has more.
Video

Video Americans' Reaction Mixed on Obama Strategy for Islamic State Militants

President Barack Obama’s televised speech on how the United States plans to “degrade and destroy” the group known as the Islamic State reached a prime-time audience of millions. And it came as Americans appear more willing to embrace a bolder, tougher approach to foreign policy. VOA producer Katherine Gypson and reporter Jeff Seldin have this report from Washington.
Video

Video Authorities Allege LA Fashion Industry-Cartel Ties

U.S. officials say they have broken up crime rings that funneled tens of millions of dollars from Mexican drug cartels through fashion businesses in Los Angeles. Mike O'Sullivan reports that authorities announced nine arrests, as 1,000 law enforcement agents fanned out through the city on Wednesday.
Video

Video Bedouin Woman Runs Successful Business in Palestinian City

A Bedouin woman is breaking social taboos by running a successful vacation resort in the Palestinian town of Jericho. Bedouins are a sub-group of Arabs known for their semi-nomadic lifestyle. Zlatica Hoke says the resort in the West Bank's Jordan Valley is a model of success for women in the region.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid