Report: Food Inflation Situation in Developing Asia during Pandemic

Mandaluyong, 29 November 2021 (TDI): Families in developing Asia spend about half their budgets on food, so rising food prices have a wide negative impact. Since the outbreak began in early 2020, food prices have steadily increased due to disruptions in the supply chain, rising shipping costs, and severe weather.

The pandemic, which causes high food prices and reduced incomes, makes the goal of eradicating hunger even more challenging. United Nations estimate of the undernourished population in Asia increased from 361.3 million to 418.0 million between 2019 and 2020 and increased the rate of malnutrition from 7.9% to 9.0%. South Asia has the worst impact, accounting for 89% of the growing number of undernourished people in Asia.

The increasing cost of living

Disruption of the domestic food supply and rising shipping costs driven by COVID restrictions, currency depreciation, and export restrictions imposed by some grain exporters have pushed up the price of domestic food in many economies in the region.

The negative impact of climate change, catastrophic weather events, and various pest infestations also contribute to rising prices for fruits, vegetables, dairy products, and other basic foods.

The spread of infectious diseases among animals has also affected food production and also disrupted the food supply chain.

Changes in food inflation from 2019 to 2020 in the Asian and Pacific economies where almost all the available economies have shown positive growth in food CPI.

During this period, food inflation increased in 29 of the 41 reporting sources, of which 17 posted food inflation rates of 5% or more. Significant increases in food prices have been observed in low-income countries such as Pakistan (11.3%), Sri Lanka (10.6%), the Kyrgyz Republic (10.3%), and Bhutan (7.8%).

Non-food inflation trends in 2020 were mixed and ranged from as low as 10.3% to as high as 18.6% economically.

The Increasing Unemployment

In addition to high food prices, households also face unemployment and loss of working hours during the pandemic. Increased unemployment in 21 of the 23 ADB member states with available data from 2019 to 2020. Of these, 16 economies saw the unemployment rate increase by at least 10%, while more than one-third increased by 20% or more.

The highest increase in unemployment rates was noted in the Philippines (5.2%) Hong Kong, China (2.9%) Azerbaijan (2.4%) Bhutan (2.3%), and Indonesia (1.8%).

In terms of working hours, the region as a whole has lost an average of 8% by 2020. Among the regions, South Asia recorded the highest working hours loss of 13.6%.

This is followed by Central Asia and West Asia at 9.2% and Southeast Asia at 8.4%. The Pacific recorded a very small change in working hours lost by only 2.4%. High levels of unemployment and long lost hours translate into reduced income for affected families.

Both high food prices and reduced income contribute to families’ access to healthy and nutritious food and, in turn, contribute to an increase in undernourishment.

East and Central Asian Economies

Prior to the COVID, widespread speculation about undernourishment showed that many sub-Asia and Pacific regions were showing significant progress in reducing undernourishment by 2030. However potential progress has slowed even more than was observed in decades before due to the effects of climate change and other factors.

The East Asian and Central Asian economies are likely to eradicate undernourishment by 2030, but other economies in South Asia and Southeast Asia must continue to accelerate their efforts to achieve the 2030 goals.

The pandemic makes the goal of eradicating hunger even more challenging in a number of ways, although the full extent of its impact is difficult to forget due to the lack of available data.

The pandemic exacerbates the vulnerability of people who are already suffering from undernourishment and malnutrition as this increases the risk of illness and death. In addition, undernourishment of expectant mothers may affect the health of the children while malnutrition in children may also lead to poor learning outcomes.