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

EU Court Fines Poland for Hosting CIA 'Black Sites'

Ruling is first time a court has acknowledged suspects were held and tortured at the sites, under US program launched following the 9/11 terrorist attacks More

Migrant Issues Close to Home Spur Groups to Take Action

Groups placing water, food in the desert, or aiding detainees after release, have one common goal: no more deaths of migrants crossing illegally into the US More

Video At AIDS Conference, Prevention Pill Stirs Excitement

Truveda shows promise, spurring debate over access and other approaches 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.
Israel Targets Gaza Supply Tunnelsi
X
July 24, 2014 4:42 AM
The Israeli military has launched a ground operation in Gaza to destroy the myriad tunnels that may have been used to smuggle weapons to Hamas. VOA's Zlatica Hoke reports that could mean more hardship for the people of Gaza, who obtain some of their essential supplies through these underground passages
Video

Video Israel Targets Gaza Supply Tunnels

The Israeli military has launched a ground operation in Gaza to destroy the myriad tunnels that may have been used to smuggle weapons to Hamas. VOA's Zlatica Hoke reports that could mean more hardship for the people of Gaza, who obtain some of their essential supplies through these underground passages
Video

Video MH17's 'Black Boxes' Could Reveal Crash Details

The government of Malaysia now has custody of the cockpit voice and flight data recorders from Malaysia Airlines Flight 17, which was hit by a missile over Ukraine before crashing last week. As VOA's Carolyn Presutti reports, the so-called black boxes may hold information about the final minutes of the flight.
Video

Video Living in the Shadows Panel Discussion

Following a screening of the new VOA documentary, "AIDS - Living in the Shadows," at the World AIDS conference in Melbourne, a panel discussed the film and how to combat the stigma associated with HIV/AIDS.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video US Awards Medal of Honor for Heroics in Bloodiest of Afghan Battles

U.S. combat troops are withdrawing from Afghanistan, on pace to leave the country by the end of this year. But on Monday, U.S. President Barack Obama took time to honor a soldier whose actions while under fire in Afghanistan earned him the Medal of Honor. VOA's Jeff Seldin has more from the Pentagon.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.

AppleAndroid