India, among major emerging markets, looks most at risk to economic destabilisation from the growing global food "panic", which on Friday prompted an alert from the United Nations over soaring costs for importers.
India "appears the most vulnerable major emerging market" to rising agricultural commodity prices, with the country's food inflation "to be in double digits in coming months", Barclays Capital said.
The country's vulnerability reflects in part the large proportion of income that Indians spend on food, which accounts for 36% of the average consumption basket.
However, it is also the weak start to its monsoon, which is running 22% behind average so far this season, stoking "uncertainty for a number of summer crops including rice, pulses and oilseeds", the bank said.
"Monsoon failure, thus, remains a significant near-term risk for prices of several agricultural commodities."
The rise in international prices only adds pressure "by reducing the viability of imports and raising the opportunity cost of foregone exports", BarCap said.
"The ongoing weather conditions, unless they improve considerably in the coming months, can disrupt the usual pattern of food exports from India."
India is a major shipper of cotton and sugar, with concerns over India exports, besides the dent to Brazilian supplies from heavy rains, fuelling a rise of more than 20% in New York raw sugar futures since the end of May.
"Speculation that Indian officials may have a change in heart on sugar exports, given the weak monsoon, remains supportive for global [sugar] prices," Luke Mathews, at Commonwealth Bank of Australia, said.
'Temporary burst of inflation'
However, Brazil looks unlikely to have a programme of supporting economic growth thrown off the rails, and "should remain more tolerant of a temporary burst of inflation" prompted by higher food prices, BarCap said.
Meanwhile, the dent to China is set to be limited somewhat by its reliance for food on rice and wheat, for which price rises have been less sharp, and by relatively large reserves, compared with the times of the last price spike, in 2007-08.
Earlier this week, Goldman Sachs flagged the risk that soaring food prices might to efforts by China and other emerging markets to boost their economies by, through stoking inflation, limiting the enthusiasm of central banks for lowering interest rates.
However, while warning that higher food prices could lead to a 5% rise in overall Chinese consumer price inflation, flagged offsetting factors from other sectors.
"For now, the downward price pressures in other non-food price components suggest that the recent rally in food prices will not significantly derail the ability of emerging market central banks to pursue the accommodative policy that is expected to keep demand supported," the bank said.
The threat to international food prices from the grains rally was highlighted on Friday by an alert from the UN's food agency, the Food and Agriculture Organization, which warned of a 20% rise in corn export prices so far this month.
"Prices were underpinned by continuous concerns about the impact of hot and dry weather conditions on yield potential of the 2012 maize crop in parts of the US," the agency said.
Wheat prices had risen 21%, lifted also by fears for Black Sea wheat harvests, although the Thai rice export prices had fallen, reflecting "ample export supplies and slower demand".
'In a panic'
Meanwhile, futures prices were signalling that "the market is in a panic", broker US Commodities said, noting the premium of near-term contracts in corn and, especially, soybeans.
"November soybeans are now trading $2.20-per-bushel premium to July 2013 soybeans," the broker said.
"This is the same crop year. This means someone is willing to pay a $2.20-per-bushel premium, not counting carry cost, which would be about another $0.70-per-bushel just to secure a supply.
"It is unheard of to basically to pay a $3-per-bushel premium to make sure you have a supply."