GO
Loading...

Asia Pacific Climbing Food Prices Feeding into Inflation

CNBC Asia Pacific
Monday, 24 Jan 2011 | 5:43 PM ET

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hi, I'm Chloe Cho and you're watching “Asia Market Daily”.

Climbing food prices are a big reason behind rising inflation across the Asia Pacific region.

In South Korea, a spike in the price of napa cabbage is sparking fears of yet another kimchi crisis.

While the foot and mouth outbreak - which has led to the culling of millions of cows and pigs - has caused retail pork prices to jump about 8 percent, from the December average.

Down in Australia, some grocery giants are warning they may have to import more fruit and vegetables to keep prices stable, after the devastating floods.

Besides South Korea and Australia rising prices in Indonesia, Vietnam and China are also a major concern.

(Package starts)

(SOT) Prakriti Sofat, Regional Economist, Barclays Capital:

“Food inflation has been rising and clearly the risk from energy prices as well and I think the key point for policy makers right now is it feeding into inflation expectations and hence into wage demands and also into core prices. Just a hike in interest rates is not going to reduce food prices, but what it does do is contain inflation expectations going forward.”

And runaway food prices will no doubt be on the agenda, during the Reserve Bank of India's planned policy meeting tomorrow.

(SOT) Prakriti Sofat, Regional Economist, Barclays Capital:

“We did see a big unseasonable pick up in food prices in December and we think the Reserve Bank of India will actually hike rates by 25 basis points this week. Both in reverse repo as well as repo rates to try to contain again inflationary expectations. The RBI being hawkish to make sure the food price spike does not spill over to other generalized expectations of prices.”

(Package ends)

That's the latest “Asia Market Daily”.

I'm Chloe Cho from CNBC Asia.

All Rights Reserved. A Division of NBC Universal.