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Rising Global Prices of Imported Food Hit Poor Asian Countries Hardest


The United Nations' Food and Agricultural Organization says the global cost of imported food will rise to $745 billion this year, the highest level on record. Claudia Blume at VOA's Asia News Center in Hong Kong looks at what is causing the price increases and how they affect the Asia-Pacific region, especially the poorer countries.

Countries around the world will have to pay 21 percent more for imported food this year than they did a year ago. That is according to the FAO, the United Nations' Food and Agricultural Organization.

The price of dairy products has risen the most, almost 65 percent over a 12-month period, because of growing global demand - especially in China, where per-capita consumption of milk products has risen steadily in the past few years. Grain and vegetable oil prices jumped almost 40 percent.

In addition to rising demand for food as populations become more prosperous, the increase is blamed on higher freight costs, and shortages resulting from poor grain harvests in such wheat-producing countries as Australia. The FAO says another major reason is the soaring demand for biofuels, which diverts food products to the production of ethanol.

Nancy Morgan, a commodities analyst with the FAO's regional office in Bangkok, says, in the Pacific Islands, for example, the indigenous crop of cassava, a local food, is increasingly being used for biofuel production, while people eat imported wheat instead.

"All over sudden you got a double whammy in terms of food security, because you have import prices going up, and then you would have less availability of these alternative domestic produced calories, products that are important for calorie contribution to diets," said Morgan.

Morgan says some of the poorest countries in Asia will be hardest hit by the higher import prices.

"These are basically the big grain importers," she said. "There is Bangladesh, there is Pakistan, Indonesia - even countries in the Pacific Islands are very vulnerable because 30 percent of their imports are corn and wheat. Also in Papua New Guinea and Timor Leste."

The FAO is worried that those countries will be forced to reduce food imports, which increases the risk for malnutrition among the poorest sectors of the population.

India has already banned the export of wheat in order to keep prices low. Morgan says export bans such as India's aggravate the volatility of agricultural prices on international markets, however, adding to the complexity of the problem.