Severe flooding in Thailand and rising US dollar push up costs
Jessica Lim Straits Times 11 Oct 11;
MAJOR rice importers here are raising the prices of 10 popular premium brands - from as early as next week - because of developments in Thailand.
These brands have a 40 per cent share of the retail market, according to estimates from importers.
Severe flooding in recent months has destroyed rice fields and the Thai government, to fulfil an election promise, is buying rice from farmers at prices 44 per cent higher than the market rate.
According to the Thai Rice Exporters Association, the price of premium Thai grain, a global benchmark, has jumped from US$988 (S$1,260) to US$1,130 per tonne in the past six months.
'We have not increased prices for two years. We don't want consumers to suffer but we can no longer absorb it,' said Mr E.K. Lim, operations manager of See Hoy Chan, which supplies supermarkets and about 2,000 provision shops.
The firm, which brings in popular brands Heavenly, Golden Phoenix and Golden Tiger, is increasing prices next week. A 5kg bag of Golden Phoenix brand, which costs $13.50 to $15 here depending on the seller, will go up by $1 while 10kg bags, which cost $26 to $28, will cost $2 more.
The other two brands' prices will rise by a similar amount.
Chye Choon Foods - which brings in the Peacock, Golden Prosperity and Golden Leaf brands - will increase prices by 5 to 10 per cent next month.
Topseller - which brings in Royal Umbrella, Golden Peony and Harmuni - will charge up to 10 per cent more by year end.
Importers said the rising US currency has also jacked up cost.
For those who buy housebrand rice, they will be glad to know that supermarkets do not plan to raise prices yet but at least one - Cold Storage - has been told by suppliers to expect a price hike.
NTUC FairPrice, Cold Storage, Shop N Save, Giant, Prime and Sheng Siong have kept prices of their housebrands constant for at least the past six months.
A spokesman said Cold Storage is working closely with suppliers to monitor the market while NTUC FairPrice will 'ensure that any price increase by suppliers is justified', said Mr Tng Ah Yiam, managing director for group purchasing, merchandising and international trading.
He added that the supermarket - also a major importer of rice - stockpiles more than three months' worth at any one time to ensure supply and price stability. It also imports rice directly and signs contracts with manufacturers.
Consumers Association of Singapore's executive director Seah Seng Choon said it was inevitable that price increases - if they continue - would have a widespread effect.
He noted that supermarket chains buy in bulk and have bigger bargaining power but 'if prices keep going up, then their stock will run out and their suppliers will start to increase prices too'.
However, he said a repeat of the 2008 rice crisis is unlikely, because importers, burnt from experience, had made moves to get supplies from other countries too.
Last year, Singapore imported 310,135 tonnes of rice. Some 53 per cent came from Thailand, 26.2 per cent from Vietnam and 13.8 per cent from India. The rest came from countries like Myanmar, the United States and China.
A spokesman for the Ministry of Trade and Industry said it did not anticipate a sharp spike in overall prices due to the country's diversification strategy that would keep prices 'fairly stable'.
Adding it was too early to determine the full impact of Thailand's new rice pricing scheme, she said importers are required to maintain a rice stockpile as a buffer against sudden supply shortages.
In 2008, prices of premium rice surged to more than US$1,200 a tonne.
The future price, however, is anyone's guess.
Mr Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said the picture will get clearer only next month, when a new crop is harvested.
'Now, many importers are still using the old stock. We will get a better idea of how things will be after November,' he added, noting that he will not be surprised if the price of premium Thai rice surges to US$1,400 a tonne this year.
Thai rice prices may increase at year-end
Seet Sok Hwee Channel NewsAsia 10 Oct 11;
SINGAPORE: Prices of Thai rice in Singapore may increase towards the end of this year. This comes as Thailand was hit by its worst floods in decades over the past week.
Singapore retailers Channel NewsAsia spoke to said they are monitoring the situation and will aim to keep prices affordable. Some have also stockpiled a few months' supply to ensure price stability.
Another reason for the possible rise in prices is because of the Thai government's move to buy rice from its farmers at higher prices. This in turn has pushed up global export prices.
Alan Tang, PSC Corporation's senior vice-president (group consumer business & corporate planning), said: "As a responsible rice importer in Singapore, we've been trying our best to contain (prices).
"But I see that very soon, before the end of the year, we have to make some adjustment... To the best of our ability, we may be able to contain [the rise in prices to] below 10 per cent."
-CNA/ac
