Rising food-demand in Asian region: Credit Suisse

While a rise in food prices could pose challenges to Asian governments prompting them to rely on further trade restrictions, investors might reap benefits from taking exposure to farm investment-related companies, Credit Suisse said in a report release here today.     

"We estimate that agri-consumption in the region has grown at around 4 per cent CAGR in the last 15 years versus agricultural growth of 3.7 per cent...The food demand in Asia is expected to rise at 3.7-3.8 per cent per annum," Credit Suisse's Principal Head of Research, Nilesh Jasani, told reporters here.     

An unprecedented increase in food and essential commodities prices had forced India's policy-makers to adopt a host of fiscal measures to hold back spiralling inflation which has now risen to 8.24 per cent.     

On the monetary side also, the country's apex bank, the Reserve Bank, has recently resorted to tight measures such as effecting a 0.75 per cent hike in Cash Reserve Ratio (CRR).     

"We expect rising consumer subsidies and more state procurement, higher trade protections and other inventory boosting efforts in the coming few years if aggregate food prices continue to rise," Jasani said.