MANILA (AFP) - The era of cheap food for Asia is over as surging demand, supply problems and the growing production of biofuels will keep food prices high, the Asian Development Bank warned Tuesday. In its latest Asia Economic Monitor report, the Manila-based lender warned that while previous food price surges were "cyclical and temporary," the higher prices now being seen were caused by permanent changes. "This time, the impetus appears to come from persistently rising demand ... primarily from rapidly-growing emerging market economies, suggesting that there is a structural and permanent trend at work," the report said. The ADB cited the average 7.4 percent growth in gross domestic product (GDP) in Asia since 2000, saying it had created a "structural shift in demand, particularly for food." Higher incomes have resulted in increased food consumption and a greater demand for meat, which bolsters the need for grain and feed stock. This shift comes as agricultural productivity remains low or stagnant, with production unable to meet the demand due to low capitalisation and underinvestment in agricultural research and development, the bank said. Growing urbanisation has also created competing demands for land and water, while rising energy prices have increased the costs of fertiliser, irrigation and food transport by 30-50 percent in the past year, it said. Production of biofuels in Europe and the United States, frequently supported by government subsidies, have also driven up the prices of agricultural commodities such as corn, forcing increased use of substitutes like soybean and palm oil. The ADB said public hoarding, through export bans and restrictions in China, Thailand and Vietnam, and panic-buying in the Philippines, had contributed to the price pressures. Because only 10 percent of total rice production is traded internationally, any news of supply disruptions, especially in big producer countries such as Vietnam and Thailand, quickly set off price spikes, the bank said. Strong economic growth is likely to keep demand on the rise, while biofuel production is expected to grow. Meanwhile,the ADB on Tuesday cut its 2009 growth forecast for the region's developing economies to 7.6 percent, citing tighter credit and soaring food and energy costs. The bank trimmed its previous growth forecast from April of 7.8 percent, and said actual growth could be lower if either inflation or the US economic slowdown were worse than expected. It maintained the 2008 growth forecast for the region at 7.6 percent, with China set to dip below five years of double-digit growth to 9.9 percent in 2008 and 9.7 percent next year. However, it sharply raised its 2008 inflation forecast for East Asia to 6.3 percent this year, from 5.1 percent in its April outlook. Inflation averaged 3.9 percent in East Asia last year. Vietnam would be the worst off with 19.4 percent inflation in 2008 and 10.2 percent next year. The ADB warned Hanoi to "act decisively and swiftly to prevent the economy from deteriorating further." The bank urged a "more decisive tightening of monetary policies" to fight the scourge of inflation and prevent it eating away the fruits of speedy economic growth. It noted that many governments were "behind the curve" on the issue and warned the inflation problem was deepening. "The risk of inaction is rising, and the region's monetary authorities need to formulate more forceful and preemptive policy responses," the ADB said. While economic growth in developing Asia in the first three months of the year was stronger than expected, it eased in the second quarter as slower growth in industrialised nations began to bite, the bank said. Growth in the industrialised economies of Hong Kong, South Korea, Singapore and Taiwan would slow to 4.7 percent this year amid weaker demand for their exports, before recovering to 4.9 percent next year, it said. Aggregate economic growth in the other large economies of the Association of Southeast Asian Nations should ease to 5.5 percent this year, with prospects in Indonesia, Malaysia and the Philippines moderating, it added. The region's developing nations should weather the storm "relatively well," the ADB said, adding that central bankers were faced with a dilemma in trying to keep inflation in check without depressing the economy. "Rapidly rising inflation threatens to dampen consumer spending and risks a wage-price spiral that could derail the region's recent solid growth," it said. As it has in the past, the bank said Asian nations should allow their currencies to appreciate faster to help contain price pressures.