Singapore imports 90% of its food — how does it cope with inflation?

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A rooftop farm in Singapore on May 27, 2020. The small island nation lacks natural resources and imports more than 90 percent of its food from more than 170 countries and regions.

Lauryn Ishak | Bloomberg | Getty Images

Singapore is known for its variety of street food and local cuisines, but many may not be aware that it faces a persistent challenge: food security.

The increasingly pressing issue has been thrust into the national spotlight after recent food export bans – in particular, the chicken export ban by neighboring Malaysia, including Singapore. imports 34% of its chickens.

As a small island nation, Singapore lacks natural resources — it imports more than 90% of its food from more than 170 countries and regions.

With the country vulnerable to many external headwinds, the government launched a “30 by 30” initiative to produce 30% of its nutritional needs by 2030.

But the country is already feeling the effects of rising food inflation.

Food prices rose 4.1% in April from a year earlier, compared with 3.3% in March, the Monetary Authority of Singapore and the Ministry of Trade and Industry said.

World situation

Hawker booth owners, in particular, are starting to feel the pinch as they are under pressure to keep prices low for the masses.

One example is Remus Seow, owner of Fukudon, a street vendor selling Japanese rice bowls.

Over the past six months, the prices of the products he buys, such as cooking oil, eggs and meat, have risen by 30 to 45 percent, he said.

Seow recently raised prices for the first time since opening his stall two years ago. If prices continue to rise, 20 to 35 percent of customers may no longer frequent his stall, he said.

The Monetary Authority of Singapore said high global food prices are expected to continue contributing to local food inflation beyond 2022.

Global food prices had already started to rise during the pandemic, but the war in Ukraine added to these inflationary pressures.

Food shortages will continue in the short term, and possibly even for the next two years, said Dil Rahut, senior researcher at the Asian Development Bank Institute.

Other countries cannot step in quickly to fill the void left by Ukraine and Russia because it takes at least a year to grow fresh produce, Rahut said.

Similarly, Paul Teng, associate senior fellow at the S. Rajaratnam School of International Studies, warned that even if the war ended, food prices would not immediately return to pre-war prices.

Indeed, factors such as rising fuel costs, labor shortages and a disrupted supply chain are exacerbating the current food shortage, keeping prices high, Teng said.

The World Bank reported that food prices are expected to rise by around 20% this year before slacking off in 2023.

stumbling blocks

While Singapore is still doing relatively well in maintaining food security, its future is unknown, Teng said.

“Singapore has downplayed agriculture and importing food,” he said. “Now we have turned around and started to ramp up, but it needs time to pay off,” he added.

The “30 x 30” plan aims to give Singapore a sufficient level of self-production to weather the tough times, but it won’t be enough to completely replace imports, Teng said.

Indeed, the government has decided to invest more in the growth of the country’s gross domestic product and average household income rather than investing in agricultural activities, he added.

“As long as you have money and as long as there is no interruption in the supply chain, you can always buy food somewhere because the volume we need is not (relatively ) not very high,” Teng said.

But while it would be “technically and technologically” possible for Singapore to meet its target, two issues remain: prices and consumer attitudes towards “novel foods”, he added.

Teng said consumers are particularly wary of buying “natural foods” and may not accept “new foods” – like lab-grown chicken and alternative sources of protein – which make up a large portion of the diet. goal “30 by 30”.

But Rahut warned it would be “very difficult” to meet the target as the deadline is approaching and Singapore is still producing only 10% of its own nutritional needs.

People will also continue to buy imported foodstuffs if they are cheaper than local ones, unless the government can subsidize the products, he added.

Seow, likewise, said he would not buy local produce unless prices matched import prices.

“But the only way (to move forward) is for the government to step up and do its best to keep prices, quality and demand for what we need,” he said. “And then people will gradually accept (local products).”

Rahut also suggested that the marketing of local products like high quality and nutritious food may induce consumers to buy it at a higher price, just as some are willing to pay more for products marketed as organic.

What can Singapore do?

Both Teng and Rahut said the government can, in the short term, provide safety nets to the poor, for example through cash payments or vouchers.

But Teng added that one of Singapore’s weaknesses is that even though it tries to diversify its imports from a basket of countries, it still relies heavily on just one or two countries.

For example, Singapore imported 48% of its chickens come from Brazil and 34% from Malaysia in 2021, said the Singapore Food Agency.

Teng also noted that most of the chickens imported from Malaysia are live chickens, while the rest of the chickens imported from Brazil and other countries are frozen.

At the policy level, it will therefore be important to diversify imports for different types of products, Teng said, for example by finding more sources of live chickens to import.

The government can also encourage more Singaporean companies to grow food overseas and enter into agreements with other governments to ensure that products are not subject to export bans, he said. he adds.

“The overall solution is to make sure that producing countries, exporting countries, have a surplus (of food), and there are lots of ways to help other countries do that,” Teng said.

Likewise, Rahut added that since Singapore is such a technologically advanced country, he might consider helping other countries improve their food production systems.

“This will not only help Singapore stabilize its food prices and food security, but also global food security and food prices,” Rahut said.

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