PRESS RELEASE

Increase in Food Prices Has Eased in the First Half of 2012

Food prices show signs of easing in the first half of 2012, the Retail Price Watch Group (RPWG) observes. Singapores Consumer Price Index (CPI) for food has come down to 2.3 per cent in June from 3.8 per cent in January this year, compared to a year ago. The slower pace of food inflation has an impact on household expenditure as food expenses take up a considerable portion of each households monthly budget.

The RPWG has also observed that the prices for some common food items have declined or remained fairly stable. Taking a snapshot of the average retail prices of selected food items in Singapore, the RPWG observed that prices of a number of food items have declined (9 food items), remained the same (4 food items) or increased by a moderate amount (4 items by less than 1 percent) in the second quarter of 2012 compared to the first quarter (Table 1).

Table 1: Average Retail Prices of Selected Items ($) S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Food Item Hen eggs (10 eggs) Watermelon (per kg) Potatoes (per kg) Orange (each) Chilled Chicken Wing (each) Spinach (Bayam) (per kg) Duck (per kg) Thai Rice (100% Fragrant) (5kg) Cooking Oil (2kg bottle) Ordinary White Bread (400g) High Fibre Bread (400g) Chilled Mutton (per kg) Hen (per kg) Instant Coffee (200g bottle) Instant Noodles (5 pkts) Carrots (per kg) Sugar (2kg) 2012 Q1 1.93 1.34 1.75 0.34 0.67 2.71 6.79 12.73 6.08 1.46 2.20 17.79 5.89 10.00 2.24 1.94 3.34 2012 Q2 1.84 1.28 1.68 0.33 0.66 2.68 6.72 12.68 6.07 1.46 2.20 17.79 5.89 10.03 2.25 1.95 3.36 % change -4.66 -4.48 -4.00 -2.94 -1.49 -1.11 -1.03 -0.39 -0.16 0.00 0.00 0.00 0.00 0.30 0.45 0.52 0.60

Source: Average retail prices of selected items are available in the Monthly Digest of Statistics (MDS) published by Department of Statistics (DOS), Singapore (http://www.singstat.gov.sg/pubn/reference.html). DOS collects price data for more than 1,000 types of off-the-shelf food items from major retailers, including wet markets, supermarkets and provision shops.

The RPWG advises consumers to take advantage of lower prices or promotions whenever possible. For some, another way to achieve more value for money is to consider purchasing housebrand items. Housebrand items are comparable to more prominent brands in quality, and their prices are often lower. A check with the RPWGs three supermarket members (NTUC FairPrice, Giant and Sheng Siong) reveals that their housebrand items provide a more economical alternative for consumers in Singapore. The RPWG notes that the prices of various housebrand items from these supermarkets are also lower than the national average retail prices of retail items in the same category. (Table 2)

Table 2: Examples of Cheaper Housebrand Items from Major Retailers in June 2012 S/N Item Supermarket Housebrands Average Retail Price1 $3.05 $1.25 to $1.45 $5.00 to $5.49 $1.39 to $1.80 $1.80 to $1.95 $5.45 $4.62 $1.60 to $1.64 $1.15 to $1.20 $2.55 to $2.95 $11.18 to $12.30 $1.20 National Average Retail Price2 $5.03 $1.65 $6.04 $1.83 $2.20 for 400g $6.21 for 1.5 litre tub $9.86 $2.25 $1.46 for 400g $3.36 $12.64 $1.64 for 400g

1 2 3 4 5 6 7 8 9 10 11 12
1 2

Cheese3 (packet of 12 slices) Condense Milk (397g tin) Cooking Oil (2 kg bottle) Hen Eggs (per 10) High Fibre Bread (400+100g) Ice Cream4 (2 litre tub) Instant Coffee3 (200g) Instant Noodles (5 packets) Ordinary White Bread (600g) Sugar (2 kg packet) Thai Fragrant Rice (5 kg packet) Vitamin Enriched Bread3 (600 g)

Source: NTUC Fairprice, Diary Farm Singapore, Sheng Siong Source: Monthly Digest of Statistics (MDS), Department of Statistics (DOS), Singapore 3 Price of housebrand item was provided by only one supermarket chain. 4 Prices were similar across two different supermarkets housebrands. Note: Consumers are advised to consider the prices with regards to the product quantity and grade, as these may differ between housebrand items.

The RPWG, led by Mr. Lee Yi Shyan, Senior Minister of State for Ministry of Trade and Industry and National Development, was set up in late February 2011 to keep a close watch on any excessive price increases of daily necessities and anti-competitive behaviour from businesses in Singapore. The RPWG will also continue working with retailers to assure consumers that there are many choices in the market, and economical quality alternatives remain easily available.

MINISTRY OF TRADE AND INDUSTRY 7 August 2012

For more information on Domestic Food Inflation, please refer Annex.

Annex Domestic Food Inflation in 2011 The increase in domestic food prices last year mirrored the sharp rise in global food commodity prices. As Singapore imports over 90% of our food, we are largely subject to global supply disruptions caused by weather-related crop failures. However, compared to global prices1, Singapores import prices and domestic prices for a wide variety of food items rose by a smaller extent. (Chart 2) This could be attributed to several factors, including: (a) the general appreciating trend of the Singapore dollar; (b) the long-term contractual agreements that food importers have with their suppliers; and (c) the diversification of food import sources.
Chart 2: Change in Global and Import Prices of Selected Food Categories, 2011

Combating Rising Cost of Living in 2012 The Government is helping to cushion the impact of rising cost of living for lower and middle income groups. Cash grants are offered directly to help households deal with inflation. These include the GST Vouchers 2012, Grow and Share package and U-Save rebates. Although these grants do not reduce inflation, they are targeted help to cushion the higher cost of living that these households experienced. Consumers in Singapore have a wide range of good quality brands to choose from, including more economical alternatives. Retailers regularly offer discounts on special items. Consumers can also take advantage of these discounts and achieve greater cost-savings on their household expenditure.
According to UN FAO Food Price Index, global food commodity prices have increased by 18.1% in 2010 and another 22.8% in 2011 on average.
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Important Note on the Retail Price Watch Group The RPWG encourages businesses to help allay the publics concerns on excessive price increases in daily necessities. Businesses may, for instance, do this through promotions that benefit consumers facing price increases, or a commitment to keep prices stable for a period of time. The RPWG advocates free market competition as the most effective way to achieve the lowest price of any goods. It welcomes efforts by businesses to help consumers combat inflation but does not impose on business to perform specific price reduction programmes.