SMS S. Iswaran's reply to Parliament Questions on rice issues

Question No 551 of Notice Paper No 69 of 2008

Name and Constituency of Member of Parliament
Er Lee Bee Wah, Member for AngMo Kio.

Question
To ask the Minister for Trade and Industry in view of moves from some rice exporting countries to curb their exports (a) how will this impact the supply of rice to Singapore; (b) whether there is any government-to-government contact to secure supplies for Singapore should the situation worsen; and (c) whether there is any special government task force monitoring the situation.

Question No 553 of Notice Paper No 69 of 2008

Name and Constituency of Member of Parliament
Madam Cynthia Phua, Member for Aljunied.

Question
To ask the Minister for Trade and Industry what steps have been taken to ensure that there is no illegal hoarding of rice by unscrupulous traders or retailers to take advantage of the rising prices.

Answer
The global price of rice has risen substantially since the beginning of 2008. This is driven by a multitude of short and long term factors such as increasing global demand, adverse weather affecting crops, falling yields of farmland and underinvestment in farming technologies in rice producing countries. Some rice producers like Vietnam, India and China have reduced or curbed rice exports to ameliorate the impact on domestic prices. However, these export restrictions are mainly placed on white rice and not the premium rice that we mainly consume in Singapore. As such, these moves have not disrupted our rice supply.

More importantly, our rice merchants are still receiving their rice orders and there is no curtailment in the import of rice. Thailand, which is a major source of rice for us, has not limited its exports and has pledged to continue meeting global orders. Its rice harvest last year was healthy, leading to a significant 72% increase in its exports in the first three months of this year.  

Singapore’s demand for rice is also very small compared to total global rice production. For example, we account for only 2% of Thailand’s total rice exports.

Over the years, Singapore’s rice imports have also been well-diversified from several countries which helps to mitigate the effect of any supply disruptions in a particular source country.

Given the market volatility and global developments, MTI is monitoring the situation closely in consultation with other agencies like MND, AVA, MFA and IE Singapore, as well as the market players.

Cynthia  Phua’s question has a more domestic focus.  MTI has been monitoring the rice market very closely. Our rice importers have been conducting their business responsibly and maintaining normal supplies to consumers, despite the volatility in global markets. There is no evidence or report of rice importers colluding to restrict supplies and drive up prices. In fact, the importers have requested to bring in more stock to meet increased demands from consumers. MTI is supportive of this move.

MTI has responded to our rice importers’ request by allowing additional imports of rice with more flexibility to their mandated stockpile requirements. In doing so, the Government aims to facilitate those who are keen to import beyond their normal quantities to meet market demand. This will also help ensure that Singapore has a slightly bigger buffer of rice than at present so as to cushion us even more against any possible future supply shock.

It is not in the interest of rice importers to indulge in any form of anti-competitive behavior. We have a competitive rice market with more than 30 importers. Any attempt by errant importers to withhold supply and increase prices will result in loss of customers and market share to other market players.

Also, as a condition of their license, rice importers are not allowed to engage, directly or indirectly, in price fixing or other unfair trade practices relating to the import or sale of rice. We view such anti-competitive behavior very seriously, and will not hesitate to take action against any errant business.