Soaring fuel costs stoke food price rise

Dubai: Rising international crude oil prices forced major Asian oil consumers such as India and Malaysia to raise fuel prices yesterday amidst fears of further rise in inflation.

Oil's four-fold price rise since 2003 has hit consumers around the world, and forecasts that prices are unlikely to fall under $100 a barrel has forced governments to act, despite fears of galloping inflation.

The rising fuel price rally has forced Taiwan, Sri Lanka, Bangladesh and Indonesia to review subsidies. India raised petrol and diesel prices by about 10 per cent and cooking gas by 17 per cent yesterday.

Rising fuel prices have impacted food prices across the world due to rising costs and substitution of food crops with bio-fuel inputs. A UN summit in Rome on the global food crisis asked rich nations yesterday to help revolutionise farming in Africa and the developing world.

Facing double-digit inflation largely driven by supply bottlenecks and food prices, many Gulf countries are planning to invest in food production abroad. Financial Times reported yesterday that Abu Dhabi is preparing to launch an agricultural project in Sudan to develop more than 70,000 acres of land to secure food supplies.

The project comes amid growing interest from other Middle Eastern states such as Saudi Arabia and Egypt to invest in Sudan to ensure food security.