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INFLATION
VICHAYA PITSUWAN
The world's food crisis is expected to last for another five years, but expensive food is here to stay, Thailand's National Food Institute predicts. An estimated 805.4 million people in the world are still living below the standard of daily food intake, said the institute's director, Yuthasak Supasorn.
''The world is still facing a food crisis situation that is expected to last for another three to five years,'' Mr Yuthasak said at a seminar on global opportunities for small and medium-sized food producers in Thailand.
''Expensive food prices will remain even after the crisis is over.''
As long as fuel prices increase, Mr Yuthasak said food prices would also be on the rise as fuel was involved in every step of food production.
The recent increase in oil production by Saudi Arabia has not not been enough to bring down global fuel prices as demand has vastly outpaced supply. Analysts now predict that fuel prices would remain high in the future.
''If fuel prices continue to increase and the the world still suffers from natural disasters, there is the possibility that food prices will soar by 20 to 50 times in the next 20 years,'' he said.
Other factors such as decreasing farmland caused by urban expansion, competition in farm products and an increasing world population have all contributed to the expensive food prices.
''As the kitchen of the world, Thailand should enjoy the current situation as it should mean that farm products are in high demand and with better price,'' said Mr Yuthasak.
But according to Paiboon Ponsuwanna, chairman of the Federation of Thai Industries' (FTI) food industry club, rising production costs from higher fuel prices have trimmed margins.
''Food manufacturers are not much better off from the better food prices,'' he said. Apart from rice, other food products have seen the gains offset by an increase in production costs, he said.
Thailand is the world's 15th largest food provider and the second largest provider in Asia Pacific after China.
The country's food exports are growing at the same rate as in recent years, at about 12% a year, with value expected to reach 650 billion baht this year.
''We have maintained the position as the world's kitchen for so long, but we need to improve ourselves,'' Mr Paiboon said, citing production capacity and competitiveness as the priorities.
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