MANILA (AP) — A billion poor people in Asia require food aid and sound fiscal policies to help them cope with skyrocketing food prices, the Asian Development Bank said today. Four rice-exporting nations meanwhile prepared to discuss a proposed cartel to control the staple grain.
Underscoring the fallout from price rises that have sparked food riots in Haiti, Egypt and Somalia, the ADB said its growth estimate for Asia this year would be cut if prices continued to rise, and that next year would be even worse, erasing the gains made in recent decades across the region.
“Their purchasing power has been eroded, placing them at greater risk of hunger and malnutrition,” ADB President Haruhiko Kuroda said of Asia’s poor, as the bank opened its annual two-day meeting in Madrid.
The statement came after the rice market plunged into uncertainty when the Philippines, the world’s biggest importer, failed in an attempt to boost its stocks of the food that many Asians eat with every meal.
The tender to increase its buffer stock attracted only one bidder, indicating a tightness in global exports, which could push prices even higher, traders said.
On the other hand, the Philippines’ decision to delay another tender until prices dip could temper prices because of a lower immediate demand for the grain.
That is the uncertain situation that rice exporters Thailand, Cambodia, Laos and Myanmar face as they meet tomorrow to discuss a proposal by Thailand, the world’s largest rice exporter, that they form a cartel. They are trying to assuage concerns that they might force up prices by limiting supplies.
Unlike the Organization of Petroleum Exporting Countries, the purpose of the rice cartel would be “to contribute to ensuring food stability, not just in an individual country but also to address food shortages in the region and the world,” Cambodian Prime Minister Hun Sen said today.
“We shall not hoard (rice) and raise prices when there are shortages,” Hun Sen said.
The Philippines wasn’t convinced.
Edgardo Angara, chairman of the Philippine Senate’s Committee on Agriculture, fears a small group of producers could control the staple food and price it out of reach for “millions and millions of people.”
“It is a bad idea. … It will create an oligopoly and it’s against humanity,” Angara said Friday.
Malaysia was considering banning locally grown rice from being taken out of the country to prevent shortages, a cabinet minister said today.
The move was aimed at cracking down on shoppers from Singapore and Thailand who have been taking advantage of cheaper rice and other food items in neighboring Malaysia. Malaysia is not a rice exporter and imports about 30 percent of its needs, but local rice is cheaper than in neighboring countries.
On Saturday, the Asian Development Bank announced emergency funding to help poor countries struggling with rice prices. But it warned that the price of rice and other farm products could keep rising and that would stifle economic growth in the region.
Kuroda, the bank’s president, said a continued rise in food prices would cut growth this year in Asia by just over 1 to 1.5 percentage points, with cuts of 3.4 to 4.2 percentage points next year, depending on whether the increases also triggered inflation and further fuel price rises.
But Australian Trade Minister Simon Crean said the crisis could spawn some good by spurring renewed efforts to liberalize global trade in the Doha round of world trade talks.
“Getting an outcome in Doha is an absolute bedrock position for addressing the food crisis in the future,” Crean told reporters in Bali, Indonesia, where Southeast Asian trade ministers met over the weekend.
He said some countries think they can solve food shortages by restricting exports — erecting more trade barriers — which adds urgency to the need to achieve a successful Doha outcome.
The Doha round has repeatedly stalled since its inception in Qatar’s capital in 2001, largely because of wrangling between rich and poor nations over liberalizing farm trade and, more recently, manufacturing trade.
Associated Press writers Ker Munthit in Cambodia, Sean Yoong in Malaysia and Daniel Woolls in Spain contributed to this report.
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