Singapore imports 90% of its food – how is it coping with inflation?

A rooftop farm in Singapore on 27 May 2020. The small island nation has no natural resources and imports more than 90% of its food from more than 170 countries and regions.

Lorin 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 constant challenge – food security.

An increasingly pressing issue has been high in the spotlight following recent food bans – in particular the ban on chicken exports from neighboring Malaysia, from which Singapore imports 34% of its chickens.

As a small island nation, Singapore has no natural resources – imports more than 90% of its food from more than 170 countries and regions.

As the country is vulnerable to many external headwinds, the government has launched a “30 on 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 percent in April from a year earlier to 3.3 percent in March, according to the Singapore Monetary Authority and the Ministry of Trade and Industry.

Global situation

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

Remus Seou, owner of Fukudon, a stall selling Japanese rice cups, is one example.

In the last six months, the prices of the products he buys, such as oil, eggs and meat, have risen between 30% and 45%, he said.

Seow recently raised prices for the first time since opening its booth two years ago. If prices continue to rise, 20% to 35% of customers may not patronize his booth again, he said.

Singapore’s monetary authorities said rising global food prices are expected to continue to contribute to local food inflation after 2022.

Global food prices have already begun to rise during the pandemic, but the war in Ukraine has exacerbate this inflationary pressure.

Food shortages will continue in the short term, and probably even in the next year or two, said Dil Rahut, a senior fellow at the Asian Development Bank Institute.

Other countries cannot quickly fill the gap left by Ukraine and Russia because growing fresh produce takes at least a year, Rahut said.

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

This is because factors such as rising fuel prices, labor shortages and disrupted supply chains will exacerbate existing food shortages, keeping prices higher, Teng said.

This was announced by the World Bank food prices are expected to rise by about 20% this year before relief in 2023

Stumble stones

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

“Singapore is downplaying agriculture and food imports,” he said. “Now we have made a U-turn and started to increase, but it takes time to pay off,” he added.

The 30-on-30 plan aims to give Singapore a level of self-sufficiency enough to get through difficult times, but that will not be enough to completely replace imports, Teng said.

This is because the government has decided to invest more in the growth of the country’s gross domestic product and the average household income, instead of 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) very large,” Teng said.

But while it would be “technically and technologically” possible for Singapore to achieve its goal, two questions remain – prices and consumer attitudes towards “new food”, he added.

Teng said consumers prefer to buy “natural food” and may not accept “new food” – such as laboratory-raised chicken and alternative sources of protein – which is a big part of the “30 to 30” goal.

But Rahut warned that achieving the goal would be “very difficult” as the deadline approaches and Singapore still produces only 10% of its own food needs.

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

What can Singapore do?

Both Teng and Rahut said the government could provide protection nets for disadvantaged people in the short term, for example through cash payments or vouchers.

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

For example, Singapore contributes 48% of his chickens are from Brazil and 34% from Malaysia in 2021, the Singapore Food Agency said.

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

Therefore, at the policy level, it will be important to diversify imports of different types of products, Teng said, such as finding more sources of live chickens to import from.

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

“The solution to the big picture is to make sure that the producing countries, the exporting countries, have a surplus (food) and there are many ways we can help other countries do that,” Teng said.

Similarly, Rahut added that because Singapore is such a technologically advanced country, he could seek help from other countries to improve their food production systems.

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

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