ISLAMABAD, April 2: Last year's inflated food prices and the onset of high oil prices in 2011 have prevented 15.6 million people in the region to get out of poverty and have pushed other 3.7 million below poverty line – totalling around 20 million people in poverty, says a new report of UN regional commission for Asia and the Pacific.

Given the Asia-Pacific economic dynamism, the effect of the rise of prices for staple food on poverty was not an increase in the total number of the poor, which could have happened if the increase in prices was given higher, but it was a slowdown in the rate of poverty reduction, says a just-published assessment of ESCAP.

Within the region, the South Asian are the hardest hit with inflation rates either close to, or above, double digits for 2010 and likely to go up further if food prices are taken as an early warning signal.

In fact, China, Indonesia, Malaysia, Pakistan, South Korea, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam are all experiencing unexpected price pressures to varying degrees driven by higher prices of food items which constitute the single most component of the consumption basket from 30 to 40 per cent over much of the region, the assessment says.

Given the onset of high oil prices and the continued increase in food prices in 2011, estimates of further impact on poverty were produced considering three scenarios.

In the first scenario, if the rise in prices continues in 2011 at half rate of 2010 and the average oil price reaches $105, there will be a slowdown in the rate of poverty reduction in the region with 9.8 million people affected – of whom 8.3 million would be prevented to get out of poverty while an additional 1.5 million people would be pushed into poverty.

If prices in 2011 rise at the same rate as in 2010 and the average oil price reaches $115, a more pessimistic scenario, the resulting slowdown of poverty reduction is expected to affect 20.2 million people – of whom 15.1 million people would be prevented to get out of poverty while an additional 5.1 million people would be pushed into poverty.

In an alternative scenario of further increase in food inflation and oil prices, with staple food prices in 2011 rising at twice the 2010 rate and average oil price reaching $130, the total number of the poor in the region is expected to actually increase with 42.4 million people affected – of which 24.6 million people would be prevented to get out of poverty and 17.8 million would be pushed into poverty.

The assessment recommends that developing countries in the region need to reform overall food policies given the recent upsurge in food inflation.

In South Asia productivity has failed to keep pace with rising demand. Even the creation of large food stocks for use in public distribution systems has failed to mitigate price surges resulting from periodic supply shocks.

Droughts and floods in major producers of wheat in Asia-Pacific, who together are responsible for almost half of global production, have affected 222 million people and caused an estimated damage of $35 billion, which includes lost crops.

Pakistan deferred the partial lift on wheat export ban after summer floods destroyed at least 725,000 tons of grain.