THE price of Thai rice is heading north, a result of an increase in wholesale rates brought about by a poor harvest.
The increases, which have taken hold at some stores, such as the Sheng Siong group of supermarkets and iEcon outlets, range from 50 cents for a 5kg bag to $3 for a 10kg bag of top-drawer grain.
A 10kg bag of the premium Golden Phoenix fragrant rice at heartland chain MCP supermarket, for instance, now costs $24.80, up from $21.80 last week. The chain has also raised the prices of another premium brand, Royal Umbrella: A 10kg bag now costs $27.80, up from $25.80.
At iEcon provision stores, prices have risen by between 50 cents and $2, depending on the grade of rice. The situation is similar at other neighbourhood provision stores and heartland supermarkets.
However, Singapore's biggest supermarket chains - NTUC FairPrice, Giant and Shop N Save - are holding prices steady for now. The Cold Storage chain has raised prices for just one brand, SongHe, by 10 per cent.
The reason: Their stockpiles are larger, and they are still drawing down on supplies bought from wholesalers before prices were raised.
FairPrice's director of integrated purchasing Tng Ah Yiam said the 93-outlet chain is aware that suppliers of some brands of rice have raised their prices.
It will strive to hold prices for as long as it can, he said, adding that as one of the major rice importers in Singapore, it stockpiles more than three months' supply at any time.
How long this situation will continue, however, is open to question.
Some experts are saying the holdout cannot last for much longer.
Said Singapore Polytechnic retail management senior lecturer Sarah Lim: 'These chains buy in bulk and have enough stock to hold the price longer than small provision shops. But it is going to happen sooner or later, probably within the next three months.'
The price of Thai rice has been creeping up since early last year, as poor weather in the country dented the yearly harvest. A stronger Thai baht coupled with heightened demand worldwide have also driven export prices up.
Wholesale prices have risen from US$854 (S$1,186) a tonne last January to US$1,116 a tonne now.
And things may get worse. Some supermarkets and provision stores say they are holding back on raising prices till after the Chinese New Year, for fear of losing sales to bigger players during what is a peak sales period for them.
PSC Corporation, which runs the 100-store iEcon franchise, said that although there has been a 5 per cent to 12 per cent increase in the price of rice at all its stores, 'the wave of price increases is just beginning'.
The current situation has parallels to that in mid-2008, when rice prices spiralled to a record of US$1,278 a tonne after poor rice harvests led to several major rice-exporting countries banning exports.
That, in turn, led to a global shortage that put an even bigger squeeze on prices.
Thai Rice Exporters Association president Chookiat Ophaswongse, in fact, fears a repeat of 2008.
'We are seeing it happen all over again,' he said. 'By the middle of 2010, it is likely that prices will go above 2008 levels.'
It is not just rice which is costing more.
Global food prices have been creeping up too, with soya bean, edible oils and other items commanding high prices.
The United Nations Food and Agriculture Organisation's food price index rose for a fourth straight month in November to hit its highest level since September 2008.
But Singaporeans are in a better position now than they were back when the 2008 increases hit - there is much more choice now if they find the prices of Thai rice or other items too high to stomach.
This is because the last round of increases prompted a renewed push to diversify Singapore's food sources.
As a result, rice from several countries such as Vietnam, the United States and Australia is widely available here.
But Singaporeans, it seems, are diehards when it comes to rice, and this may backfire on them.
About 60 per cent of the rice consumed in Singapore is from Thailand and poor sales of the grain from other sources may force sellers to abandon them altogether.
Mr Ong Ah Tee, a 64-year-old retiree, proffers a typical response when asked if he would switch to, say, Vietnamese rice: 'I am so used to good rice. How can I change?'
limjess@sph.com.sg
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