Saturday 29 December 2012

Supermarkets to maintain rice prices

Three chains pledge to hold prices of house brands steady for now
By Jessica Lim, The Straits Times, 28 Dec 2012

SUPERMARKETS here said yesterday that they will be maintaining the prices of their house-brand rice for now.

This move will bring relief to consumers worried by recent talk that rice-exporting nations might band together to raise prices.

NTUC FairPrice, the first supermarket chain to make the announcement yesterday, said it would maintain prices for all its 10 Thai and Vietnamese rice house brands until the end of March. It started freezing prices for its house-brand rice in November 2011, to allay consumer fears.

The Dairy Farm Group of supermarkets - Giant, Shop N Save and Cold Storage - told The Straits Times that they would also maintain the prices of 12 house brands of rice from Thailand, Vietnam, India and Pakistan until March.

Sheng Siong will be doing the same for its four house brands of rice until the end of June.

The announcements offer reassurance to consumers, following talk earlier in the year that South-east Asia's rice-exporting nations - Thailand, Vietnam, Cambodia, Laos and Myanmar - would create a formal alliance to boost prices and export revenues.

The price of Thai fragrant rice, which importers say accounts for about 70 per cent of the market here, has rallied about 4 per cent this year compared with last year.

According to the Food and Agriculture Organisation (FAO) of the United Nations, prices of Thai fragrant rice averaged US$1,090 (S$1,325) a tonne for the first 11 months of this year, up from US$1,047 for the corresponding period last year. Prices shot up to US$1,200 a tonne in 2008, when floods destroyed harvests and prompted several big rice-exporting countries to ban sales abroad.

Prices worldwide are typically pegged against that of benchmark Thai rice as the country is the world's largest exporter of rice.

Local importers link the rises to the Thai government's scheme, introduced last year, to buy rice from small-scale farmers at prices 50 per cent above market rates.

"Exporters source for rice for us and they say they have to pay higher prices. Farmers can choose not to sell to them and to sell to the government instead," said Mr Danny Tang, 40, an assistant vice-president at Topseller, a major importer here. "Other farmers also raise prices and exporters from other countries follow suit."

The importer of popular rice brands such as Golden Peony and Royal Umbrella said it increased prices again in September after dropping them in March.

A 10kg bag of Royal Umbrella rice now costs $28.80, up from $26.80 in March.

Topseller, which said it is the exclusive distributor of the brand here, plans to boost prices to $30.80 after Chinese New Year.

"We will see the response and proceed from there. We don't want to increase prices all at one time for all our brands," said Mr Tang, who added that Topseller supplies rice to about 2,000 hawker stalls, restaurants, supermarkets and provision shops.

Singapore imported 325,927 tonnes of rice in the first 11 months of the year from sources such as Thailand, India and Vietnam.

Recently, delivery-truck driver Samad Kassan, 52, switched to eating house-brand rice only.

The father of four, who buys from Giant supermarket, said: "I did it to save a few dollars. After my daughter started work and eating out, we switched to house brands. They're quite good."

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