FOOD INFLATION: STRATEGIES FOR NAVIGATING ANINCREASINGLY HUNGRY ASIASatish LeleVice PresidentMay, 2011                    ...
Frost & Sullivan is a strategic consulting company that helps clients growtheir businesses. We have a total of 2000 staff ...
Notable news      Chilli prices quadruple in Indonesia      Onion prices soar in India      Cabbage prices hit kimchi lovi...
2008 and 2011                                                              Source: FAO   • Food prices back and over 2008 ...
Food prices              • Asia – 3.3 billion population              • Two third of the world poor –                660 m...
Root causes for price rise  Fundamentals               vs.   speculation   Weather                         Currency hedge ...
Some realities• More, and more wealthy people eat - China  consumed 20 kg of meat in 1985 per person,  50 kg in 2010.     ...
Some realities                         A third of the food produced in the world                         gets lost or wast...
So how to combat food inflation?    First of all, is it possible to combat food                        inflation?        T...
Options - depends which side of the “poverty fence” you sit on?                     - Do something?                       ...
How to combat food inflation  Government   Immediate   • Interest rates to curb inflation   • Control commodity prices   •...
How to combat food inflation  Government   Long term   • Change ratio between natural and forced     irrigation   • Improv...
How to combat food inflation  Crops and Structure  • New crop strains for uncertain weather  • Improve lab to farm speed  ...
How to combat food inflation  Individuals  • Eat better, less and more selectively  • Minimize waste  • Moderate our meat ...
So what next?  A gaze into the looking glass…                      15           “We Accelerate Growth”
Malthus to FEU-US                    16   “We Accelerate Growth”
Situation 2020                 • 1.6 billion to 6 billion in 20th century                 • Food production has outpaced  ...
What to expect by 2020• Climate and population• Water will increasingly become an issue for people and crops• World will a...
Conclusion   • Given current situation volatility will continue   • Globally we need a little bit of rethink              ...
Conclusion Oh and yeah.. In the meantime if you have a bath tub, better stockpile commodities!                         20 ...
Last but not least..                       Thank you                           21      “We Accelerate Growth”
For Additional InformationDonna Jeremiah                 Carrie LowDirector                       ExecutiveCorporate Commu...
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Frost&Sullivan Food inflation-Strategies for navigating an inceasingly hungry asia-2011

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Frost&Sullivan Food inflation-Strategies for navigating an inceasingly hungry asia-2011

  1. 1. FOOD INFLATION: STRATEGIES FOR NAVIGATING ANINCREASINGLY HUNGRY ASIASatish LeleVice PresidentMay, 2011 “We Accelerate Growth”
  2. 2. Frost & Sullivan is a strategic consulting company that helps clients growtheir businesses. We have a total of 2000 staff in 40 countries Our Lead Offer: Growth Partnership Services 1 Research Services TEAM 2 Growth Consulting 3 Training Market Engineering Research Growth Consulting Corporate Training & Analyst Briefings Growth Workshop Development Market Insights Whitepapers Industry Tracker Top of Mind Surveys Mover & Shaker Interviews Growth Opportunity Newsletters Client Councils Best Practices Analyst Inquiry Hours Awards Customer Research Economic Impact Articles Country Industry Forecasts Financial Benchmarking & Analysis Technical Insights Research Technical Insights Alerts CLIENT PORTAL & E- BROADCASTS 2 “We Accelerate Growth”
  3. 3. Notable news Chilli prices quadruple in Indonesia Onion prices soar in India Cabbage prices hit kimchi loving S Korea Corn hits $7.76/bushel in April 3 “We Accelerate Growth”
  4. 4. 2008 and 2011 Source: FAO • Food prices back and over 2008 peaks • Non energy and Metals & Minerals also at highest level 4 “We Accelerate Growth”
  5. 5. Food prices • Asia – 3.3 billion population • Two third of the world poor – 660 million live in Asia • 10% increase in food prices will push another 64 million into poverty 5 “We Accelerate Growth”
  6. 6. Root causes for price rise Fundamentals vs. speculation Weather Currency hedge Population growth Safe asset class Population affluence Physical holding Transport costs Volatile trading New demand Embargoes 6 “We Accelerate Growth”
  7. 7. Some realities• More, and more wealthy people eat - China consumed 20 kg of meat in 1985 per person, 50 kg in 2010. Obesity: % of population with BMI greater than 30, older than 15 7 “We Accelerate Growth”
  8. 8. Some realities A third of the food produced in the world gets lost or wasted. Loss and Waste – 1.5 billion tons A forgotten priority? • Consumers in rich countries waste almost as much food as the entire net food production of sub-Saharan Africa FAO report – May 2011 8 “We Accelerate Growth”
  9. 9. So how to combat food inflation? First of all, is it possible to combat food inflation? To an extent “yes if we want to”. 9 “We Accelerate Growth”
  10. 10. Options - depends which side of the “poverty fence” you sit on? - Do something? - Do nothing? - Panic? 10 “We Accelerate Growth”
  11. 11. How to combat food inflation Government Immediate • Interest rates to curb inflation • Control commodity prices • Protect domestic production • Improving food supply chain infrastructure • Integrated food and dairy processing centers 11 “We Accelerate Growth”
  12. 12. How to combat food inflation Government Long term • Change ratio between natural and forced irrigation • Improving food supply chain infrastructure • Integrated food and dairy processing centers • Manage political pressures for increasing farm land availability • Technology transfer from developed world 12 “We Accelerate Growth”
  13. 13. How to combat food inflation Crops and Structure • New crop strains for uncertain weather • Improve lab to farm speed • Productivity increase through better and cheaper equipment • Investment in Storage Infrastructure • Diversify sources – S America, Africa • Reduce bio-fuel crop usage? 13 “We Accelerate Growth”
  14. 14. How to combat food inflation Individuals • Eat better, less and more selectively • Minimize waste • Moderate our meat consumption 14 “We Accelerate Growth”
  15. 15. So what next? A gaze into the looking glass… 15 “We Accelerate Growth”
  16. 16. Malthus to FEU-US 16 “We Accelerate Growth”
  17. 17. Situation 2020 • 1.6 billion to 6 billion in 20th century • Food production has outpaced population Mechanization Green revolution Land area Agriculture chemical • What we have done to get here may not sustain us for 2020 and beyond 17 “We Accelerate Growth”
  18. 18. What to expect by 2020• Climate and population• Water will increasingly become an issue for people and crops• World will add 890 million by 2020 – 836 million in developing countries• Food will fall short Wheat Rice Maize 14% 11% 9%• Prices will increase by 20%• Trends in dietary habits will change to cope with the shortfall 18 “We Accelerate Growth”
  19. 19. Conclusion • Given current situation volatility will continue • Globally we need a little bit of rethink 19 “We Accelerate Growth”
  20. 20. Conclusion Oh and yeah.. In the meantime if you have a bath tub, better stockpile commodities! 20 “We Accelerate Growth”
  21. 21. Last but not least.. Thank you 21 “We Accelerate Growth”
  22. 22. For Additional InformationDonna Jeremiah Carrie LowDirector ExecutiveCorporate Communications Corporate Communications(603) 6204 5832 (603)6204 5910 djeremiah@frost.com carrie.low@frost.comJessie LohManagerCorporate Communications(65) 6890 0942jessie.loh@frost.com “We Accelerate Growth”

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