Hawkers in S'pore raise food prices as Russia-Ukraine war drags on, hitting supply costs

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Hawkers in S'pore raise food prices as Russia-Ukraine war drags on, hitting supply costs

https://www.straitstimes.com/business/economy/hawkers-raise-food-prices-as-russia-ukraine-war-drags-on-hitting-supply-costs

SINGAPORE - Hawkers are feeling the squeeze of rising food costs and many have had to pass on part of the costs to consumers.

In March, Mr Andy Liu, who sells Western food at various coffee shops islandwide, raised the prices of all his dishes by 50 cents to $1. He also removed all egg items, such as fried eggs, from his menu following a surge in the price of eggs.

"The cost of my ingredients keeps going up. Just two months ago, I paid $28 for a box of french fries. Today, the same box of fries costs $48. Prices of meat have also gone up.

"And it's not only the prices of ingredients that are rising. I have been told there is a global shortage of many food items, like french fries, chicken and beef," said Mr Liu, 29, owner of Andy's Grill Express.

"Because of the shortage in supply, my food suppliers had put a cap on my orders. Hence, I had to source more suppliers to ensure that I have enough chicken and french fries to sell."

Over at Bukit Timah Market and Food Centre, hawker Fang Lin Xia, the owner of Golden Chopsticks, which sells fried carrot cake and fried oyster omelette, has raised the price of her fried oyster omelette from $5 to $6.

A small packet of the omelette needs three eggs, she said.

And it is not only the price of eggs, which has gone up by a whopping 36 per cent since she started her business last year. Ms Fang said she is also struggling to cope with the rising prices of cooking oil and imported oysters from South Korea.

"My husband and I felt that we should not compromise on the quality of our fried oyster omelette by reducing the ingredients. So, we decided to raise the selling price for just the small portion. We did not increase the price for our medium and large size options," Ms Fang, 40, said in Mandarin.

"We did not receive any negative feedback from customers on our price increase. Most customers are very understanding."

The price hikes come at a time when world food prices hit a record high in March, up by 12.6 per cent from February.

Russia's invasion of Ukraine has caused further disruption to the global supply chain crisis, which saw unprecedented upheavals following Covid-19 lockdowns, production issues, shipping container shortages and labour disruptions.

They sent freight fees skyrocketing, said analysts.

Ms Selena Ling, chief economist at OCBC Bank, said: "The latest increase reflects new all-time highs for vegetable oils, cereals and meat sub-indices, while those of sugar and dairy products also rose significantly.

Ms Fang said she is also struggling to cope with the rising prices of cooking oil and imported oysters from South Korea. ST PHOTO: FELINE LIM

"Since Singapore is not a major producer of any commodities, especially food, we are a price taker, according to the Prime Minister."

In his May Day speech last week, Prime Minister Lee Hsien Loong spoke on the far-reaching impact of Russia's invasion of Ukraine on the world and on Singapore.

PM Lee said that given Singapore's small size in world markets, "we are always a price taker; we have very little bargaining power".

He added: "If prices go up, our prices go up. If supplies are short, we are squeezed. We cannot avoid these global headwinds".

Ms Ling said: "If there is no near-term respite from high energy or commodity prices, then it's possible to see further price increases. But the first price hikes are usually the most shocking."

Mr Rakesh Agarwal, an advisory partner at KPMG, said that because Russia and Ukraine are major food exporters of wheat and corn, their conflict has further impacted food prices.

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With some countries moving to impose export bans to secure their own supply, and China continuing to impose strict lockdowns in parts of the country, the global food supply continues to be disrupted, which further exacerbates the inflation issue, said Mr Agarwal.

In March, Singapore's annual inflation rate climbed to 5.4 per cent, from 4.3 per cent in February, a high not seen since April 2012.

Mr Lim Gek Meng, chairman of Chinatown Complex Hawkers' Association, said in Mandarin: "Hawkers have different backgrounds and they have different reasons for increasing the prices of their food.

The price of eggs has gone up by a whopping 36 per cent since she started her business last year. ST PHOTO: FELINE LIM

"Some older-generation hawkers pay a lower rent and they can afford to just increase their prices by 20 cents. But the younger-generation hawkers pay a much higher rent and they may need to increase their prices by 50 cents to $1.

"But with so many hawker centres in Singapore and hawker food being a part of the way of life for many Singaporeans, I don't think hawkers can 'suka-suka' raise their prices or they may risk losing some customers."

"Suka-suka" is a Malay slang meaning "as and when one likes".

Mr Lim Yu Yuan, 25, who helps out at his parents' Geylang Laksa & Prawn Noodles stall at 45 Sims Drive, said: "The price of cooking oil has almost doubled. Prices of raw ingredients like fresh coconut and prawns have been going up since last year. My parents were very hesitant to increase our prices.

"I told them that we can't keep absorbing the higher costs. They eventually agreed to increase the price of our laksa and prawn noodles from $3.50 to $4 in February. For the higher price, we also added an extra slice of prawn into it."

Mr Surendran Daniel, 35, who runs Heavens, an Indian food stall at 20 Ghim Moh Road Market and Food Centre, said he raised the price of his food items by 10 to 50 cents in January.

"Four months ago, a tin of oil cost $28. Last week, it was $46. This week, it has gone up to $49. Our costs have gone up so many times. Our margins are definitely slimmer. But for some elderly, regular customers, we still charge them the old price," said Mr Surendran.

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Mr Tan Poh Chye, 66, who has been selling minced pork noodles at Kaki Bukit 511 Market and Food Centre for more than 20 years, said he is still considering if he should raise prices.

"My stall is located in one of the oldest estates in Singapore, with a large elderly population. The Covid-19 pandemic has already caused many livelihood issues for many people. I am very reluctant to increase the price of my noodles," said Mr Tan.

"On the other hand, the costs of noodles, oil and gas keep rising. I may have to eventually increase my prices, too. But for now, I am still mulling over it."

Ms Jade Chua, 27, a sales and marketing executive, who eats hawker food every day, said she is not aware of higher food prices as she buys her food from different stalls.

"I don't really monitor the food prices. I think a price increase of 30 to 50 cents is acceptable. But if the rise is $1 or more, I would pay only if I really like the food," said Ms Chua.

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