Prices up by as much as 56%; failed crops and competition from biofuels blamed
Jessica Lim & Esther Tan, Straits Times 3 May 08;
WHILE rice has grabbed the headlines, the price of cooking oil has also been on a steady march north, driven by failed crops and competition from new-age biofuels.
In the last two months, retail prices have jumped between 9per cent and 56 per cent, depending on the brand, according to a survey released yesterday by the Consumers Association of Singapore (Case).
The cheapest oil available to consumers at major supermarkets here is the Cabbage brand of vegetable oil at $4.90 per 2kg bottle.
But even this is up from $4.50 in March. Its Knife brand counterpart - a premium brand - costs almost twice as much, according to the Case study, which was based on checks at eight supermarkets.
The association's survey is the first on monthly food prices and will be published on its website, www.case.org.sg.
Rising retail prices reflect a global trend in increased edible- oil prices, say importers.
They have seen prices more than double in the last three years. A tonne of refined liquid palm oil - the industry benchmark - costs US$1,200 (S$1,630), up from about US$450 in 2005.
Recent reports show that global edible oil prices rose 15 per cent in the first two months of this year.
The price increases have been driven by decreased crop yields due to climate change and competition from biofuels, which are made from the same plant extracts.
Said Mr Wong Mong Hong, deputy president of the Food Manufacturers Association: 'I have been in the industry for 38 years and this is the second time prices have been this high. The last time was in 1982 when there was a palm-oil shortage. This time, biofuels are the culprit.'
He said about 12 per cent of cooking oil produced by the world is now being directed to biofuels, a much-touted and clean-burning alternative to fossil fuels.
Demand for biofuels is expected to expand by almost 20per cent per year through 2011 despite recent concerns about their impact on the environment and world food supplies.
Price-conscious consumers 'can get around the price hike', said Case president Yeo Guat Kwang, by 'looking at their budget and comparing prices at different supermarkets'.
He said: 'Vegetable oil is among the cheapest kind of oil, while other types of oil, like sunflower oil and canola oil, are more expensive.'
However, vegetable oil, popular with hawkers, is still prone to wild jumps.
Said Mr Wong Shu Kiat, 43, owner of a coffee shop in Serangoon: 'Prices have fluctuated from about $10 to about $40 these three months. It cannot be helped. What matters is business must be good.'
Mr Chen Kern Wuan, president of the Newton Hawker Centre Stallholders Association, said hawkers usually refrain from changing the types of oil they use. But they may soon have to.
Mr Chen added: 'We will think of switching types of oil if things get worse, but we try not to do that because the taste of our food might change.'
