Credit Suisse, the financial services major, revealed in a study that the demand for food in Asia is expected to increase by about 3.8% per annum from 2009 to 2018, more than the world food demand, as reported by BusinessStandard.

Nilesh Jasani, Principal Head of Research, Credit Suisse, said that the agricultural-consumption in Asian region increased at a CAGR of nearly 4% since 1993 over around 3.7% of agricultural growth and the demand for food in the region is anticipated to rise at 3.7-3.8% every year, as reported by TheFinancialExpress.

According to Credit Suisse, food makes up for one-third of personal expenditure and 15% of GDP in Asia, and provides livelihood to nearly 55% of the region’s population.

The rising population of Asia is identified as the main reason for increase in demand for food in the region. Also, due to increase in hoarding and exporting of agricultural food items by producers, food supply is declining, which is already inadequate to fulfill the food demand in the Asian region.

Moreover, increase in subsidization of food products by the Asian countries’ governments is fuelling food demand in the region. Also, due to changing consumption pattern of Asian consumers, demand for various types of food, especially fast food, is increasing in the region and resulting in increase in food demand.

Further, the rising food demand and prices are becoming biggest challenge for the governments of Asian countries as they need to depend upon trade restrictions to meet these requirements. However, it is likely to prove beneficial for investors investing in various companies, such as food-to-fuel companies, farm investment related companies, low-end processors, and plantation related companies.

A Research Analyst at RNCOS said, “The Asian countries governments should take appropriate steps to fulfill the burgeoning food demand. Governments can frame new policies, like providing advanced technology and equipment (agricultural) to farmers at subsidized rates. Some steps on growing population and unethical trade practices should also be brought to check the food demand and bridge the demand-supply gap.”