Singapore could be affected by increasing rice prices
The El Nino and India’s non-basmati rice ban contributed to the price increase.
The rising rice prices globally could have implications for Singapore as the Lion City is importing the majority of its resources to meet its food needs.
In a report, Lavanya Venkateswaran, Senior ASEAN Economist at OCBC, said the price increases in rice will also have implications on Indonesia, Malaysia, Philippines and Thailand, with the Philippines expected to be the most impacted as it is a net importer of rice.
In Singapore, the weight of rice in its consumer price index basket is only 0.2% which is the lowest compared to its regional peers.
“Nevertheless, Singapore imports most of its food needs making it vulnerable to worsening terms of trade. More broadly, the large trade and current account surplus will provide a solid external buffer,” Venkateswaran said.
Data from the United Nations’ Food and Agriculture Organization showed that rice prices increased by 19.7% in July, reaching the highest nominal value since September 2011.
This is also worsened by the El Nino phenomenon and the ban of India on non-basmati rice since 20 July.