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Southeast Asian food prices could surge by up to 59% due to climate change & net-zero goals
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Friday, 13 December, 2024, 08 : 00 AM [IST]
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Singapore
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Extreme weather events coupled with the cost of the energy transition could result in Southeast Asia’s food prices increasing by between 30% and 59%, according to the latest report by Oxford Economics.
The paper, titled Climate Change and Food Prices in Southeast Asia - 2024 Update, has been released in collaboration with Food Industry Asia (FIA) and ASEAN Food and Beverage Alliance (AFBA), and calls for global cooperation with ASEAN policymakers to urgently ease the impact of the energy transition on food production costs.
Across Southeast Asia, average temperatures are now three degrees higher than in pre-industrial periods making extreme weather events more common and causing greater disruption to farming productivity.
Oxford Economics’ modelling demonstrates that every 1% increase in average temperatures raises food production prices by 1-2% across Indonesia, Thailand, Vietnam, Malaysia and the Philippines. The Philippines is more vulnerable to temperature changes due to its climate-related weather events and the weaker ability of its food production to respond to them. According to the report, climate change is already responsible for a 6% increase in food prices in the Philippines over the past decade.
Meanwhile, as government and private sectors strive to meet targets of net-zero emissions by 2050, the cost of energy, labour and other areas of manufacturing and distribution rises. Indonesia faces the greatest exposure to food price increases due to its dependence on fossil fuels and vulnerability to rising global food prices. This cost will be passed on to consumers, profoundly affecting low-income families who spend around 10% more of their income on food than the average household.
S Yogendran, senior advisor to AFBA, says there is urgent need for governments and industry leaders to come together and address the challenge of driving the energy transition in Southeast Asia, while easing the impact of rising food costs. He said, “Families across Southeast Asia are already feeling the pinch of rising food costs. Without coordinated action from governments and industry, achieving net-zero targets could make basic nutrition unaffordable for many. There is a great opportunity to harness rising Foreign Direct Investment into ASEAN countries and channel it into developing a more sustainable food production system. This is a global issue – our ASEAN food producers are integral to global supply chains and a rise in prices here could push up inflation around the world. Whether it’s through expertise or investment, all governments should be supporting ASEAN policymakers on a solution.”
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