Impact of Red Sea Shipping Disruptions on Singapore Consumers and Businesses

Ms See Jinli Jean asked the Minister for Trade and Industry (a) what will be the impact of the recent global shipping disruptions on local consumers and businesses; and (b) whether the Government will consider having more mitigating measures to counter such impact.

Sir, I would like to point the Member to the Ministry of Trade and Industry's (MTI) written responses to the related questions Question Nos 39 and 40 in yesterday's Order Paper. However, I welcome any supplementary questions the Member may have on this topic.

Thank you, Minister of State. Given that lower-income households spend large proportion of their income on food and much of Singapore's food is imported, to what extent does the Ministry anticipate these shipping uncertainties to impact the prices of essential food items that matter most to the lower-income families in the near and mid-term?

Sir, I thank Ms Jean See for her supplementary questions. It is an important question and it is a good reminder that incidents very far away can have an impact on a small resource-constrained nation like ours. I would like to assure the Member and Members of this House that the Government is closely attuned and monitoring, as well as acting on what is happening and the implications downstream.

First, there have been minimal disruptions to our critical supplies including food. The proportion of goods shipped from Europe by sea is small compared to Singapore's total global imports. In fact, the majority of our critical goods, including food, are delivered either by air freight from Europe or do not pass through the Red Sea.

The Government agencies do have also many tools in the toolbox that we can use to act against any of these disruptions. Let me explain a few to assure the Member.

First, Government agencies and other commercial partners have adequate measures in place to ensure that most of our critical supplies, including food, are adequately stocked and that we can activate alternative sources if needed. So, that is effectively stock-piling critical supplies, including food.

Second, we continue to expand and diversify our trade linkages and strengthen global supply chains.

Third, we have monetary policies to manage imported inflation. The Member would know that the Monetary Authority of Singapore (MAS) had announced that it will keep the exchange rate policy banned on a steady appreciation part. In line with this, Singapore's food import costs should continue to fall and exit downward pressure on food inflation over the course of the year.

And finally, fiscal policy, which I think we will discuss more in this year's Budget. And that is to help with the cost of living, including lower-income households. The Member will be aware of the $1.1 billion Cost-of-Living Support Package announced in September 2023, as well as the Assurance Package, which together, will buttress many of the cost-of-living concerns that lower-income households will face.

I would like to assure the Member, as well as Members of this House, that the Government will continue to monitor development in food prices and we will take the necessary measures, if needed.