Mr Chong Kee Hiong: To ask the Minister for Trade and Industry (a) what is the estimated impact of global supply chain problems on our economy; (b) which sectors are more greatly affected; and (c) what measures are available to help affected SMEs cope with the disruptions.
Mr Chong Kee Hiong: To ask the Minister for Trade and Industry with regard to the disruptions to the global supply chain (a) what measures is the Ministry taking to prevent potential profiteering, especially for essential products and necessities; and (b) what will be the wide-ranging impact on various sectors such as food, equipment and appliances, machineries and construction materials.
Written Answer by Minister for Trade and Industry Gan Kim Yong
1. As an open economy, Singapore firms will feel the impact of global supply chain disruptions to varying degrees, depending on their level of exposure to imported supplies, and more fundamentally, on their business practices.
2. Firms in the manufacturing sector are facing higher cost pressures as they import intermediate inputs from around the world. Similarly, firms in the construction sector have seen a rise in the costs of key construction materials such as steel bars, granite, cement and ready mixed concrete, partly due to a global supply crunch amidst the global economic recovery.
3. Given rising cost pressures and a higher frequency of supply disruptions, businesses have to hold higher inventory buffers or provide more favourable payment terms to customers and suppliers which will require higher working capital. To help SMEs with their cashflow challenges, ESG will continue to support them through the Enterprise Financing Scheme.
4. Consumers, too, may experience some price increases as a result of supply chain disruptions. For instance, domestic food prices have risen on the back of an increase in global food commodity prices, which is due in part to weather-related disruptions and manpower shortages in key food-producing countries. In addition, congestion at ports around the world have led to higher freight charges and contributed to a rise in the prices of imported consumer goods in Singapore.
5. To mitigate against price increases on essential products, Singapore has been diversifying its import sources to encourage price competitiveness. For daily necessities, consumers can also make use of the Consumers Association of Singapore (CASE)’s Price Kaki App, to compare the prices of groceries and hawker food to make more informed purchasing decisions. For low-income households, MSF continues to provide ComCare assistance to support their daily expenses. The Government keeps a close watch on the prices of essential goods and will continue to take action against businesses which seek to profiteer from the situation.