Food insecurity: it’s really alarming

Against the backdrop of growing food insecurity, the statement from Nomura’s Holdings Inc. is also worth mentioning: “Asia’s searing food prices are likely to rise further in the coming months.

The inflation is already extending beyond grains and edible oils to other categories like meat, processed foods and even restaurants. Notably, amid an unprecedented spike in wheat prices, the Indian government imposed a wheat export ban on May 13 to stabilize prices and ensure food security. Nomura pegged food inflation in India at 9.1% due to rising raw material costs.

Meanwhile, amid the rising cost of wheat to uncomfortable levels, it is the price of rice that has held stability so far. Since rice is considered to be the most important cereal for human consumption in Asia, the stability in the price of rice for now is something to be savored.

However, a unique situation in the context of rice consumption is emerging. There are all possibilities for a change in consumer behavior. Most analysts are showing their apprehension about the chances of consumers turning to rice in an effort to opt for cheaper food options.

In such a situation, higher rice prices are inevitable. Even if stocks are plentiful, consumers’ shift from wheat to rice for consumption may trigger prices to rise to unprecedented levels and there will be a run on stocks.