Prasenjit Bhattacharya, Singapore – Rising prices are making food inaccessible to many low-income families and this could spark instability in at least seven of the 14 Asian countries the UN World Food Program operates in, Paul Risley, Asian spokesman for the WFP, told Dow Jones Tuesday.
"Rising food prices may cause social instability and violence, which may even escalate to wider political instability in at least seven Asian countries," Risley said, declining to name the countries.
However, he said the countries worst affected by rising food prices are Timor Leste and some in South Asia. In South Asia, the situation is most dire in Afghanistan.
India, the largest country the WFP covers, is in a better position than many countries since the state-run subsidized grain sales program covers around 80% of the country's population, Risley said. However, he warned there could be problems if the demand for subsidized grain rises sharply.
In Asia, the WFP operates in Afghanistan, Bangladesh, Cambodia, India, North Korea, Laos, Myanmar, Nepal, Pakistan, Sri Lanka, Timor Leste, Bhutan, Indonesia and the Philippines.
Rice prices may stay high in long term
Risley said the current crisis wasn't so much about food shortage as low-income families being unable to access food because of high prices. He added the rise in food prices was straining the WFP's capability to supply cheaper food to low-income families in Asia.
The WFP's annual budget this year to provide food in Asia is $600 million, but Risley said it may have to raise $160 million more from donor countries to meet its food supply targets for the year due to a rise in the prices of rice, wheat, corn and other foodstuffs.
On rice, he said the WFP was paying up to 30% more for the rice it buys from the world market for supplying to its target beneficiaries. WFP buys the cheapest possible rice in the world market, which is usually 25% broken white rice.
Risley said not only have rice prices risen, the number of rice suppliers has also dropped significantly. "We now have only 4-5 offers for supplying rice, while three years ago we used to have 20-30 such offers."
He said export curbs in several Asian countries such as India and Vietnam have led to a drop in the number of suppliers.
Risley pointed out to a recent instance in Cambodia where some suppliers went back on their offer to sell rice to the WFP as they felt they could get better prices elsewhere, and in some cases didn't have all the rice they had offered to supply.
He said the WFP was planning for a long-term increase in rice prices, as the current rally in prices was structural in nature.