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LOWER PRICE: Owner Jimmy Soh of rice importer Chye Choon Foods believes the drop in the price could translate roughly into a 80-cent drop for a 10kg bag of rice at the grocery store. -- ST PHOTO: ALBERT SIM
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THE price of rice coming into Singapore is likely to fall in the next several months, say importers, who predict the drop will spell some relief for consumers battered by record-high prices.
Buoyed by a surge in supply - based in part on an expected bumper crop from Thailand - the price of fragrant rice could tumble to US$1,000 (S$1,370) a tonne by year-end, importers forecast.
That is 18 per cent lower than its peak last month.
This could translate into a roughly 80-cent drop for a 10kg bag of rice at the grocery store, said Mr Jimmy Soh, owner of rice importer Chye Choon Foods.
Experts say that, although fragrant rice prices may fall, they are unlikely to hit the lows of September last year when a tonne of the grain cost US$600.
Export bans and growing demand from countries like China will keep prices high, said Mr Goh Chong Theng, general manager of agri-bank Rabobank International.
With prices falling, Asian middlemen are now cutting back on imports, biding their time until later in the month when rice is expected to be cheaper.
Recent reports show that importers in the Philippines are bidding for only a fraction of the supplies they did last month in anticipation of a further drop in prices.
And Bangkok-based exporters report lacklustre trade as most buyers wait for prices to soften before making fresh deals.
Singapore rice importers are also holding back, in stark contrast to last month when they upped shipments by about 20 per cent when faced with record-high prices of US$1,200 a tonne.
Some Singaporean importers buy by the week, but they charge customers - usually manufacturers, provision shops and supermarkets - a monthly average.
While they are required by the Government to import a certain amount each month, waiting until prices fall allows them to drive down that average.
'Some importers who anticipate bumper harvests and lower prices will wait to buy at a later time, but others will continue with their regular imports because they think the rising cost of production makes the situation unclear,' said Mr Andrew Tan, chairman of the Singapore General Rice Importers Association.
In the meantime, the squeeze on global rice supplies seems to be easing up.
For one, Thailand reports that its rice harvest, just under way, appears to be a bumper one.
But even if supply increases and prices drop, consumers may not be out of the woods, said Mr Goh.
Other factors will kick in if prices fall further, he said.
'If all the importers wait for prices to fall before buying, this could lead to a price surge at the point of purchase.'
limjess@sph.com.sg
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