Beijing: Increased demand for food in Asia will help to boost prices next year, fuelling faster consumer inflation, according to Yougesh Khatri at Nomura Holdings, who flagged rising costs as a "key theme" for 2011.
Costlier food was likely to hit Asia hard as edible goods account for "a fairly large chunk" of the baskets that governments use to calculate the pace of price changes, said Khatri.
"That is likely to show up as particularly severely impacting CPI [consumer price index] next year," Khatri said in an interview.
Khatri's comments add to forecasts from Deutsche Bank and Rabobank Groep that farm-goods prices may rally in 2011. Food inflation in India gained to a six-week high this month. China needs to be prepared for a long fight against inflation, the National Development and Reform Commission has said.
Inflationary pressures in Asia are coming both from inflows of capital to the region and rising food prices, Khatri said, without identifying specific foodstuffs. Inflation is "our key theme for next year," he said.
The Food & Agriculture Organisation's (FAO) Food Price Index of 55 commodities surged for a fifth month in November to the highest level in more than two years.
