The fear of rapidly increasing food prices in Asia - Photo 1

Fear of food prices skyrocketing in Asia | World

Prices of agricultural products from wheat to canola oil and sugar have all skyrocketed over the past few months in many markets in Asia, taking a hit to businesses and consumers.
According to the Nikkei Asia, food manufacturers are passing this increased price on to end consumers, putting pressure on the consumer segment and leading to the risk of hindering the economic recovery from the effects of the Covid-19 pandemic.

Lots of reasons

The food price index benchmarked by the Food and Agriculture Organization of the United Nations (FAO) rose for 12 consecutive months to 127.1 in May, the highest level in nearly 10 years. This index reflects the prices of meat, milk, cereals, canola oil and sugar. The index in May is up to 40% higher than the same period last year.

Experts say that the rapid increase in food prices is due to a combination of factors, including increased demand in China, the world’s largest food importer, due to a rapid recovery from the pandemic. than many countries.

Food prices of the Food and Agriculture Organization (FAO) of the Food and Agriculture Organization (FAO) have increased to a record in nearly a decade

Screenshot Nikkei Asia

Sea freight costs are also higher due to lack of containers and supply chain disruptions. The FAO also points to supply-side reasons such as delayed harvests and reduced sugar cane production in Brazil.

In addition, consumer prices are also pushed up by investment cash flows into the market, as investors diversify their risks among the highly liquid financial markets.
And yet, food producers in Asia have raised prices to offset the high cost of raw materials. Major food importing countries such as Japan, South Korea and China are seeing the impact.

The price is still increasing

Nisshin Seifun Group (Japan) is expected to increase the price of wheat flour products by 2-4% in July, due to higher raw material prices, as well as higher logistics and packaging costs.

Food manufacturer Ajinomoto (Japan) will also increase the price of mayonnaise products by 1-10% next month due to the increase in oil prices in the past few months.
In South Korea, the largest bakery chain, Paris Baguette, increased the price of bread by 5.6% in February due to the increase in the price of ingredients. In China, the price of some soybean oil increased by as much as 20% in April.

Lower-income households and poorer countries will be hit harder, as most of their income is spent on food, he said. In addition, these countries also have less access to vaccines and lack the resources to cushion the impact of rising food prices.

Farmers, exporters benefit

Experts say that rising food prices contribute to job creation and income growth in rural areas. Nikkei Asia Citing data from the Bank of Thailand, the country’s agricultural income rose 14% in April compared with the same period last year. The net profit of agribusiness trader Wilmar International (Singapore) reached $450 million in the first quarter of 2021, nearly doubling from the same period last year. However, a prolonged pandemic and deterioration in some Asian economies could affect food supply and demand, complicating price forecasts.


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