Rising prices to push 64m Asians into extreme poverty: ADB

MANILA, April 26 (Agencies): Soaring global food prices threaten to push tens of millions of Asians into extreme poverty and cut the region's economic growth this year, the Asian Development Bank(ADB) warned in a report Tuesday. The ADB in its report says world food prices have surged by more than 30 per cent in the first two months. If this rate continues, as is likely, 64 million people in developing Asia could be pushed into extreme poverty and economic growth could be reduced by up to 1.5 percentage points this year, the bank warned. Domestic food inflation in developing Asian nations hit 10 per cent at the start of this year, with double-digit rises in the price of wheat, corn, sugar, edible oils, dairy products and meat, the Manila-based institution said. The report said, food inflation is likely to continue because of the global oil hikes, production shortfalls due to bad weather and export restrictions by several food producing countries. The fast increases in the cost of food are a serious setback for the region that has rebounded rapidly from the global economic crisis. ADB chief economist Changyong Rhee says food export bans should be avoided and greater investments made in agriculture. "Left unchecked, the food crisis will badly undermine recent gains in poverty reduction made in Asia," Rhee said in a statement. Vietnam has been one of the hardest hit nations in terms of rice inflation, despite being a major exporter, according to the ADB. It has has seen domestic rice retail prices shoot up 36.7 per cent since June last year, while Indonesia and Sri Lanka have endured increases of least 21 percent. China recorded rice price rises of 12.6 per cent, near the average for developing Asia. Wheat price increases were most severe in Kyrgyzstan, with a jump of 67 per cent since June last year, and Bangladesh, 50 per cent, according to the ADB. Wheat prices spiked by about a third in Sri Lanka, Mongolia and Tajikistan. The surge in food prices is due to lost farm production globally that began in the second half of last year with extreme weather and natural disasters in Asian farming belts, as well as in the United States and Europe, it said.