Commentary: Beware the long reach of the Iran war in Asia’s food systems

With many in the region, particularly India, allocating substantial fiscal resources to fertiliser and fuel subsidies or enforcing distortive price controls, the short-term incentive to force domestic food prices lower using export restrictions could prove irresistible.

A cascade of restrictions would exacerbate the shock as regional food supplies tighten.

The Philippines and Vietnam inked a deal that guaranteed rice supply to the Philippines – a major net importer – after India introduced its bans in 2023. This was a win for building regional assurances on food security. Both countries looked set to sign a similar deal earlier this year.

Regional coordination can therefore play a role. These bilateral agreements set a benchmark others could follow, especially India with its neighbours. Public pressure from net importing countries against implementing food export restrictions could also help. Collectively, this would be more effective.

Forgoing nationalistic policies will help mitigate the worst risks from the coming inflation shock to Asia’s food systems. The region would be better off for it.

Robert Walker is Research Fellow at the Lowy Institute and works as an economist in the Institute’s Indo-Pacific Development Centre. This commentary first appeared on the Institute’s site, The Interpreter.