The sustained drought in the US, India’s weaker monsoons, and dry weather in Russia and Australia are all collaborating to boost prices for agricultural products around the world—with prices for wheat, corn and soybean leading the way. As a result, investors are once again worried about higher inflation in Asia.

However, our view is that surging food inflation won’t be enough to derail Asia’s inherently strong economies. The region should withstand any negative effects, as central banks maintain a sharp focus on fueling economic growth. What’s more, some Asian governments already are assisting consumers by opening food stockpiles and allowing stronger local currencies.

The food inflation picture in 2012 is much different than in 2007-08, when drought and soaring energy costs made food prohibitively expensive in developing markets and spurred social unrest in such countries as India and Indonesia. Today, by contrast, global growth is sluggish and oil prices are subdued, keeping a lid on potential food price hikes. Most importantly for Asia, rice remains in plentiful supply.

Food accounts for about 31 percent of Asia’s consumer price indexes. Compared to the rest of the world, rice is more important than wheat for Asia. This is particularly true in Southeast Asia, where the average per capita consumption of rice is 5 times larger than wheat consumption.

Thailand, Vietnam and India are the dominant exporters of rice; as a consequence, rice prices for Asia are mainly determined by weather conditions in these countries. So far this year, rice harvests have been good in these countries, pushing down rice prices across the region. If the weather improves in the next six months, price increases will probably level off. Moreover, the subdued price of rice has given the region’s central banks a free hand to cut rates if necessary in the fall.

China exhibits a high correlation between global soy prices and domestic food price inflation. The price of pork in China will probably climb higher in September until the end of 2012, driven by the surge in world grain prices. China is the world’s biggest meat consumer, and pork consumption is expected to hit 52 million metric tonnes this year. Regardless, China is slated for massive infrastructure spending this year that should overshadow any problems caused by higher food prices.

The upshot: Cyclical growth stemming from increased infrastructure spending and monetary stimulus should overcome any rises in “agri-inflation.”

These solid, Asian-based investments remain buys at current levels: Keppel Corp (OTC: KPELY); Sun Hung Kai Properties (HK: 16, OTC: SUHJY); Taiwan Semiconductor Manufacturing (NYSE: TSM); iShares MSCI Indonesia Investable Market Index Fund (NYSE: EIDO); and LG Display (NYSE: LPL).