2024 Oxford Economics report highlights the urgent need for government and industry to address food security and curb food price fluctuations across Southeast Asia while meeting climate targets.

Extreme weather events coupled with the cost of the energy transition could result in Southeast Asia’s food prices increasing by between 30 percent and 59 percent, according to the latest report by Oxford Economics.

The paper, titled Climate Change and Food Prices in Southeast Asia – 2024 Update, has been released in collaboration with Food Industry Asia (FIA) and ASEAN Food and Beverage Alliance (AFBA), and calls for global cooperation with ASEAN policymakers to urgently ease the impact of the energy transition on food production costs.

Across Southeast Asia, average temperatures are now three degrees higher than in pre-industrial periods making extreme weather events more common and causing greater disruption to farming productivity. 

Oxford Economics’ modeling demonstrates that every one percent increase in average temperatures raises food production prices by 1-2 percent across Indonesia, Thailand, Vietnam, Malaysia, and the Philippines.  The Philippines is more vulnerable to temperature changes due to its climate-related weather events and the weaker ability of its food production to respond to them. According to the report, climate change is already responsible for a six percent increase in food prices in the Philippines over the past decade.

Meanwhile, as government and private sectors strive to meet targets of net-zero emissions by 2050, the cost of energy, labour, and other areas of manufacturing and distribution rises. Indonesia faces the greatest exposure to food price increases due to its dependence on fossil fuels and vulnerability to rising global food prices. This cost will be passed on to consumers, profoundly affecting low-income families who spend around 10 percent more of their income on food than the average household.

S Yogendran, Senior Advisor to AFBA, says there is an urgent need for governments and industry leaders to come together and address the challenge of driving the energy transition in Southeast Asia while easing the impact of rising food costs.

“Families across Southeast Asia are already feeling the pinch of rising food costs. Without coordinated action from governments and industry, achieving net-zero targets could make basic nutrition unaffordable for many.”

There is a great opportunity to harness rising Foreign Direct Investment into ASEAN countries and channel it into developing a more sustainable food production system, Yogendran says.

“This is a global issue – our ASEAN food producers are integral to global supply chains and a rise in prices here could push up inflation around the world. Whether it’s through expertise or investment, all governments should be supporting ASEAN policymakers on a solution.”

AFBA and FIA will jointly launch the paper’s findings at an event in Jakarta today, which invites food industry leaders from across Southeast Asia to explore the paper’s recommendations and discuss actionable strategies that balance the competing imperatives of energy transition and food security.

About Food Industry Asia (FIA)

FIA was founded in July 2010 by a group of leading food and beverage companies. From our base in Singapore, we seek to enhance the industry’s role as a trusted partner in the development of science-based policy in the region.

FIA provides an important hub for advocacy and debate. We bring together the food industry’s most senior business leaders to champion initiatives that promote sustainable growth and support regional policies that deliver harmonised results. Visit https://foodindustry.asia/ for further information.

About ASEAN Food and Beverage Alliance (AFBA)

The ASEAN Food and Beverage Alliance (AFBA) represents the interests of food and beverage national industry associations in the ASEAN region. It aims to promote regional collaboration and advocate for policies that enhance food security, sustainability, and economic growth.

About Oxford Economics

Oxford Economics is one of the world’s foremost independent global advisory firms, providing reports, forecast, and analytical tools on 200 countries, 100 industrial sectors, and over 3,000 cities. Its best-of-class global economic and industry models and analytical tools provide an unparalleled ability to forecast external market trends and assess their economic, social, and business impact. Visit https://www.oxfordeconomics.com to learn more.