A LONE bright spot shines amid the gloom of a worsening economy: The prices of food commodities will soon fall.
Global prices of wheat, oil, sugar and other essentials started falling in June; their trickle-down effects will be felt by shoppers in the next few weeks.
INITIAL REJOICING
'Rice is cheaper and so is cooking oil. The drop is small...but I wonder how long it will last.' Retiree Lim Choon Kiang, 80
NOTE OF CAUTION
'Unless prices of other materials drop drastically, we cannot lower prices yet.' Mr Liow Kian Huat of the Singapore Bakery and Confectionery Trade Association
Rice prices were the first to tumble. At NTUC FairPrice, for example, a 5kg bag of FairPrice Thai Fragrant White Rice which cost $8.50 in June now goes for $7.45.
Sugar prices fell next. A 1kg bag of Mitrphol Pure Refined Sugar at NTUC FairPrice which cost $1 in June now costs 95 cents.
And the price of a five-litre bottle of Lam Soon Sailing Boat Vegetable Oil has fallen from $11.51 to $10.35 at Sheng Siong Supermarket.
Prices of other items should follow suit as importers sell off the older, more expensive stock and bring in cheaper batches.
Importers and analysts say the prices are off their peaks for good and stability has returned to the market. Prices are slated to fall further before levelling out, though they are unlikely to be as low as a year or two ago.
Retiree Lim Choon Kiang, 80, who shops at supermarkets once a week, has noticed the falling prices.
'Rice is cheaper and so is cooking oil. The drop is small...but I wonder how long it will last,' he said.
For some months now, importers and market watchers have been predicting that bumper harvests and the dip in commodities in the global market would ease the squeeze on consumers.
Mr Thomas Pek, the owner of soya sauce maker Tai Hua Foods, explained that it typically takes at least three months before consumers see price fluctuation in the global market reflected in their grocery bills, given the time needed for retailers to get rid of their older, more expensive stock.
Among market watchers who do not expect prices to return to the levels of one or two years ago is Mr Goh Chong Tong of Rabobank International, which finances agricultural ventures.
Increased demand for food from coutries such as China, Russia and India will forestall this, he said.
The devaluation of the Singapore dollar against the US dollar also means prices may not fall by that much or rapidly, added rice importer Jimmy Soh.
Although uncooked food items will cost less in the coming months, a bigger time lag is needed before cooked or processed food prices register a drop.
Mr Liow Kian Huat, who chairs the Singapore Bakery and Confectionery Trade Association, pointed out that while flour prices have gone down 10 per cent to $3 for every 25kg, electricity tariffs have jumped 22 per cent.
He said: 'Unless prices of other materials drop drastically, we cannot lower prices yet.'
