Debated in Parliament on 5 Jul 2022.
Ms Ng Ling Ling asked the Minister for Trade and Industry in view of some countries’ export bans on food items, whether the Ministry has a threshold for cost increases for such items before considering intervention measures to stabilise the prices of these items.
Disruptions stemming from the COVID-19 pandemic and exacerbated by the Russia-Ukraine conflict have resulted in global supply shortages and price rises in many items, including food. Some countries have imposed export bans on food items in a bid to mitigate rising domestic food prices, which, in turn, fuelled the supply crunch and caused prices to surge further. From May 2021 to 2022, the UN’s Food and Agriculture Organization’s (FAO) Food Price index saw a rise of 22.8%.
As Singapore imports most of our food needs, we will, inevitably, be affected by the higher global prices. However, price interventions to control rising food prices may, inadvertently, result in shortages if importers stop supplying to Singapore because of price controls here. Instead, we use three key measures to mitigate the effects of higher global food prices.
The first is a strong Singapore dollar. The last three rounds of tightening of Singapore’s monetary policy have helped to moderate the pass-through effects of external inflationary pressures.
Second, we diversify our sources of food supply so that we are less exposed to supply disruptions in specific regions or countries. Because of these two measures, food inflation in Singapore has been more moderate than in the rest of the world. For May 2022, Singapore's non-cooked food prices recorded a 4.5% increase on a year-on-year basis, compared to 22.8% in the FAO Index.
Third, the Government will continue to assist lower-income and vulnerable Singaporeans through support packages, such as the $1.5 billion package announced by MOF on 21 June 2022.
Unfortunately, the higher food prices may persist for a while, given the disruptions to global supplies. The Government will monitor the situation and do more if necessary. We also encourage consumers to use the Price Kaki App developed by CASE, which allows them to compare the prices of food items from different suppliers and helps them stretch their dollars.
PAPERCUTS