Food crisis benefits exporters, but watch for delayed inflationary impact

SEVERAL of South-east Asia’s economies could stand to benefit as a global food crisis threatens. Economists and market strategists noted that food inflation has been slower in the region than globally, and that many Asean countries are net exporters of food or fuel. But one economist has advised caution when interpreting headline inflation data.

In a report last week, Maybank noted that food and non-alcoholic beverage inflation for Asean was a “modest” 4.2 per cent in April – much lower than the 8.6 per cent imprint in the European Union, 9.7 per cent in the United States and 6.7 per cent in the United Kingdom.

The milder number is partially attributable to food subsidies and price controls in the region. But the Maybank team also noted that Asean has many large agricultural exporters.