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Rising food prices are likely to prove an additional concern for central bankers trying to subdue inflation as the cost of rice – a staple food in Asia – surges the most since 2008, according to HSBC Holdings Plc.
“The memory of the 2008 Asian food price scare sits deep,” economists led by Frederic Neumann said in a research note on Friday.
“Back then, rising rice prices in some economies quickly spilled over into other markets as consumers and governments across the region scrambled to secure supplies. It also lifted the prices of other staples, such as wheat, as buyers shifted to alternatives.”
Asia braces for more rice-price shocks as India’s export ban unnerves markets
Asia braces for more rice-price shocks as India’s export ban unnerves markets
Global rice imports as a share of consumption have roughly doubled over the past 25 years, and are up around 4 percentage points since the 2008 food price scare, the note showed. “This means that disruption in one economy could have much bigger spillovers into others than in the past,” Neumann said.
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Annual water buffalo race kick-starts rice cultivation season in Thailand
Annual water buffalo race kick-starts rice cultivation season in Thailand
Malaysia and the Philippines are the two Asian economies most reliant on rice imports, followed by South Korea and Taiwan, Neumann said. Other economies such as Indonesia are exposed, too. Hong Kong and Singapore import all of their rice, though given their purchasing power they can readily secure supplies.
“Go easy on the curry,” Neumann concluded.
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