Rice prices surged to their highest in almost 12 years, after India’s rice export ban and adverse weather conditions dented production and supplies of Asia’s primary staple food, according to the UN’s food agency.

“The global rice price surge is particularly concerning,” stated Qingfeng Zhang, Executive Director of the Asian Development Bank, in an interview with CNBC.

“It appears evident that food price volatility will persist in the coming months.”

Apart from India, food inflation in Asia has been relatively mild this year.

However, a confluence of factors raises concerns that rice supply shortages could lead to a broader increase in prices of other food commodities in Asia.

These factors include extreme climate events due to global warming, the return of El Niño for the first time in seven years, Russia’s withdrawal from the Black Sea grain initiative, and protectionist food policies in the form of trade restrictions.

El Niño is a meteorological phenomenon resulting from warming water temperatures in the eastern and central equatorial Pacific Ocean, leading to unusual weather conditions with global implications.

During the peak of the 2010-2012 food price crisis, the Asian Development Bank estimated that a 30% rise in international food prices in 2011 resulted in a 10% increase in food prices for developing Asia, causing a 0.6 percentage point reduction in GDP growth for certain food-importing countries in the region.

ADB emphasized at that time how higher food prices diminish purchasing power and suggested that a 10% rise in domestic food prices in developing Asia could push 64.4 million people into poverty based on the $1.25-a-day poverty line. This would mean an increase in the poverty rate from 27% to 29% during that period.

Source: CNBC.com