Minister of State Lee Yi Shyan's reply to Parliament Question on impact of floods in Thailand on rice prices and supply

Question No 25 of Notice Paper No 71 of 2011

 For Oral Answer

Name and Constituency of Member of Parliament 
Ms Foo Mee Har, Member for West Coast GRC

Question

To ask the Minister for Trade and Industry in view of the severe floods in Thailand which had destroyed rice crops (a) what is the impact on our rice prices; (b) how dependent is Singapore on rice imports from Thailand; (c) what strategies are in place to keep rice affordable especially for the low income groups; and (d) how much rice stockpile does Singapore have.

Answer

1.  As of September 2011, the export price of Thai fragrant rice preferred by Singaporeans had risen by about 9% compared to the start of the year.

2. Singapore’s rice imports comprise only a small proportion of global rice exports. In 2010, our total volume of rice imports was only about 1% of the total rice traded in the world. Although about half of our rice imports in 2010 came from Thailand, it was less than 2% of Thailand’s total rice exports. Given our small import volumes, we are a price taker. However, it would also mean our demand can be easily met by alternative sources of supply given the size of the world market.

3. This said, when prices of rice increase in the international market, our purchases will become more expensive too. While we cannot avoid price fluctuations, we can do a number of things to mitigate sharp price spikes and possible supply disruptions.

4. Firstly, we continue to persify our supply sources. More than ever before, we now import rice from many more sources, including Vietnam, India and the United States. Our small import volume also helps ensure that we can source enough rice to meet demand.

5. Secondly, we maintain a policy of stockpile. Today, all of our rice importers keep a healthy stockpile of two-month’s supply.

6. Thirdly, to better educate consumers, MTI through the Retail Price Watch Group (RPWG) is working with major supermarket chains and retailers to highlight the variety of rice (apart from fragrant rice) available that are high in taste and quality; as well as other non-rice staples that consumers can consider as part of their healthy diet choice. Even with the Thai fragrant rice, there is a 1.5x price differential between the branded and non-branded rice.

7. MTI will continue to monitor the situation in Thailand with our importers and retailers to ensure supply and price stability.