Thursday April 03, 2008

Singapore will not impose price controls on essential food items

channelnewsasia.com :

Minister of State for Trade and Industry S Iswaran said Singapore will not impose price controls on essential food items. He was responding to calls for price controls following recent price hikes for items like rice and flour. Noting this is a global trend which has also hit Singapore, he however reassured Singaporeans there is an adequate supply of rice, and Singapore's rice sources are diverse.

- The Singapore government does not believe in subsidies or price controls, and that's the official stance communicated to me when I wrote in to the Feedback Channel back in 2004 asking about their response to peak oil. On that point I'll have to agree. Price subsidies usually lead to demand-supply inbalances in the market, and price controls typically result in outright shortages.

What I'll have to disagree on is the second point. There is an Asian rice crisis going on right now with rice prices increasing dramatically. The top rice producing countries are already starting to restrict their exports. The only thing that Singapore can count on now is the relative strength of our currency and our present ability to out-bid others. So if you are in Singapore you should not be complaining that rice prices are going up. It is only your ability to pay that is keeping the rice coming in. Think about this point carefully before you get all worked up about food price inflation.

See also :

1. Singapore CPI inflation hits 6.6% in Jan 2008 - a new 25-year record high
2. PM Lee : Singapore government will help mitigate food cost inflation
3. NTUC chief urges Singaporeans to be prepared to live with higher fuel, food prices
4. Why food costs more
5. Higher food prices to continue: World Bank

(2008-04-03 12:47:57 SGT) [Biz] Permalink Comments [4]

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