Monday, May 19, 2008 0:27
The rise and fall of rice
In Uniquely Spore • 949 views • 15 Comments
Uniquely Singapore
After reading the news reports about FairPrice not allowing customers to buy more than five 10-kg bags of rice, consumers may be flocking to Fairprice, thinking that it has the cheapest rice and stocks may run out.
Restricting consumer purchase may not protect consumer interest, and may have the opposite effect of causing even more buying to hoard rice which in turn would cause rice prices to increase further.
I refer to MP Seah Kian Peng’s reply in the Straits Times, (“FairPrice items still among the cheapest“, May 6) to Mdm Lily Cheong’s letter, “Puzzled over stiff weekly price rises at FairPrice” (ST, May 1).
Mr Seah is the Deputy CEO & COO, NTUC Fairprice Co-operative Ltd. (Parliament)
Mr Seah said:
While global rice prices have increased by more than 100 per cent since March last year, FairPrice has held its rice prices. Our house-brand rice prices have increased by 15 to 25 per cent since March last year …
Due to the low price of FairPrice house-brand rice, sales of our rice more than doubled in March and this has depleted our rice stockpile. To make sure we provide a reliable supply of rice to consumers, we have replenished our stock with rice bought at prevailing market prices.
On 6-7 May, the same day Mr Seah’s letter appeared in the Straits Times, FairPrice was selling its cheapest housebrand, Fairprice Thai Fragrant Rice (5 kg), at $6.60.
Wasn’t its cheapest housebrand fragrant rice $26.80 a week ago and $17.50 about two weeks prior to that?
So, my question is how this is possible at all – given that, as Mr Seah explained, FairPrice “depleted our rice stockpile” in March and that FairPrice had “replenished our stock with rice bought at prevailing market prices”?
Simply put, does it mean that:
Price of FairPrice’s cheapest fragrant rice (10 kg) was:
Original price: $17.50
Later part of April: $26.80.
6-7 May: $13.20 ($6.60 x two 5 kg bags) (After Mdm Lily Cheong’s letter to the Straits Times on May 1.)
Why did the prices vary so much?
Since “global rice prices have increased by more than 100 per cent since March last year”, why is it that Fairprice was selling its cheapest housebrand FairPrice Gold Superior Fragrant Rice (10 kg) at $16.20 in June 2007 (source: Case survey of household items prices, July 2007), compared to $13.20 for its cheapest house-brand fragrant rice now?
Was FairPrice’s rice over-priced by about 23 per cent in Jun 2007 ($16.20 divided by $13.20)?
100 per cent global rice in price – but 23 per cent cheaper at FairPrice?
The statement, “Our house-brand rice prices have increased by 15 to 25 per cent since March last year”, does not seem to make much sense, as it appears to have decreased by 23 per cent now, compared to June 2007.
I am puzzled as to how a 100 per cent increase in global rice prices since March 2007 can translate into rice today which is about 23 per cent cheaper than in June 2007? Was FairPrice’s profit margin higher in June 2007?
In view of this “yo-yo” pricing, I would like to suggest that FairPrice give Singaporeans more detailed information about its pricing policies.
I also refer to the article “Quick buck on rice: FairPrice acts” (Today, May 10), and media reports that customers were not allowed to buy more than five 10-kilogramme bags of rice per shopping trip from FairPrice.
Fairprice said they suspected that traders or small businesses were taking advantage of their low pricing, and the restriction is to protect consumer interest.
I was at Giant on 10 May, and it was selling Thai White Rice (5 kg) at $5.29.
On 10 May, Fairprice was selling its house-brand Thai Fragrant Rice (5 kg) at $6.60.
On 11 May, Sheng Siong’s website priced its Happy Family Whole Grain Rice (5 kg) at $5.20.
So, the cheapest rice at Giant and Sheng Siong was actually about 20 and 21 per cent cheaper, respectively, than the cheapest at Fairprice.
(Even though fragrant rice and white rice are different, for lower-income Singaporeans, the cheapest rice that they can buy may be more important to them.)
Golden Phoenix and Golden Peony
With reference to the Case Rice Price Survey released on 15 May, why is it that the entire Straits Times article (“Supermarkets cry foul over Case’s rice survey”, ST, May 16) and the Case press release are focused on the housebrand Golden Phoenix Fragrant Rice?
The ST article states that:
The cheapest Golden Phoenix rice: $13.30 for a 5 kg bag at Fairprice and $18.80 for a 10 kg bag at Prime.
Note that the comparison is for a 5 kg bag and a 10 kg bag of the same rice.
Why would anyone buy two 5 kg bags at FairPrice for $26.60, when one can buy a 10 kg bag from Prime for $18.80? The two 5 kg bags cost 41 per cent more than the 10 kg bag!
This brand curiously happens to have the highest price in the price variation range, of all the fragrant rice in the Case survey, with a price range from $13.30 to $15.00 (5 kg bag).
Why wasn’t the cheapest-range rice, Golden Peony Fragrant Rice (price range from $9 to $12.80), highlighted instead?
Wouldn’t consumers be more interested in the cheapest fragrant rice, rather than the costliest?
So, how does FairPrice fair for Golden Peony Fragrant Rice, the cheapest in the range?
The answer:
The Case survey shows “a dash” ( – ) for Golden Peony Fragrant Rice at FairPrice, and the lowest price was $9 for a 5 kg bag at Cold Storage. What does the dash mean? That FairPrice does not sell this brand, or was it out-of-stock on 6-7 May?
Finally, why did the survey not cover White Rice, which is cheaper than Fragrant Rice (which the survey said was selected because it was more popular)?
Even though White Rice may be less popular, it should not mean that we do not cover it at all.
After all, maybe the cheaper White Rice is more popular with lower-income Singaporeans?
Read also:
The Unions, the Press and the People by Leong Sze Hian and Choo Zheng Xi.
CASE’s relationship with NTUC by Leong Sze Hian.
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15 Comments
curious88
theonlinecitizen
Tks curious. Corrected. :)
Good questions, Leong, and something I didn’t notice until I read this article. Probing pieces like these show that TOC is a far superior newspaper compared to that rag The Straits Times.
NTUC sucks
ok lah – you have completely debunked the myth that NTUC helps the workers, and CASE helps the public.
Thank you TOC. Keep up the good work so I can tell my wife where are the cheapest prices!! Defintely NOT the NTUC!
Govt help
in view of the rising inflation and oil prices – any chance that the govt will reduce the petrol / diesel tax? Does anyone know how much is the tax right now? Woudn’t an abolition of such a tax reduce the inflation a bit for all citizens? I am sure govt will talk about a ‘targetted approach’ – I am getting quite sick of that word. Target this, target that, in the mean time it is the mosques and temples that are giving food vouchers, not our billion dollar surplus budget.
Damn sian!
curious88
I believe there is no tax on diesel & tax of 42 – 45 cents / litre for petrol. My guess is that it will not happen. If you can own a car, you are not exactly poor and the govt wants you to use public tpt AND most commercial vehicles uses diesel anyway (and there is no tax on diesel).
Does anyone recall if NTUC Fair Price ever claims or wants to be the cheapest (in everything) they sell. There are certainly reports in the MSM that they are cheapest in some essential items. I think lots of people mistakenly equate FAIR PRICE = CHEAP(EST) PRICE. We all know that its not true.
Dailt SG: 20 May 2008 « The Singapore Daily
[...] The Price of Rice – The Online Citizen: The rise and fall of rice [...]
tunkudon
y the private company ,pp ,mosques and temples giving out more than our gahment . they r so remarkable
Singaporean
I think the difference lies in whether one is doing it as a job, for the money or doing it out of passion. Religious organisations do it out of passion to serve and be one with their God. Whereas Case and NTUC are doing it, (the survey) because the guy or gal doing it is just doing a job to earn a salary.
The challenge then is for these so called co-operatives management to instill as sense of purpose and passion in their staff and possibly themselves too, (lead by example). Of course it doesn’t help when our present leaders are harping on money either. The culture of a nation is moulded this way after many years.
Derrick Chong
It has been playing in my mind to initiate a membership MTUC (Membership That Unite Consumers) where all families unite/contribute & we buy wholesale
all our monthly essentials (rice/shampoo/soap/toilet rolls etc) ranging fm $100 to $200 & using online ordering with ‘block delivery’. This grocery online is just a start, when proven that we can get essentials cheaper than at NTUC or any other stores,there’s much more we can do & achieve jointly.
I like Derrick’s idea. From my experience, anyone can organise this as many wholesalers do consider bulk purchases. For example, one can get seafood at Jurong Port – fresh some more, and, vegetables & fruits at Pasir Panjang Wholesale Centre. The blokes at Jurong Port don’t sell under 10-20KGs of anything though but the Pasir Panjang Centre offers its stuff for retail as well.
3 to 5 households can get together easily for this purpose with minimum logistical obstacles. I would suggest getting neighbours to collude as distribution of the purchased stuff will be easier as opposed to relatives who live a distance away.
In any case, the very fact that our citizens are thinking of these angles is certainly a step in the right direction. We simply have to look out for ourselves as no one else is going to watch over us – certainly not our multi-million dollar government, by the looks of things as they are.
If you go to eat at those vegetarian indian restaurants or shops in little india, they are still shelling out the rice like nobody’s business. Are they not affected? The food prices are somewhat the same though.
True Union
Hi Derrick,
I have been thinking along the same lines. I think this can be easily done within small estates of a few blocks. The costs involved can be made totally transparent. If nothing else, people can find out what the true cost prices are, and compare that to the selling price in our ‘national’ supermarkets.
Is it legal in Singapore to set up such a non-profiting cooperative? Even if it is registered as a business, it will be one with zero profit, and hence no taxes.
Would be grateful to hear the more worldy-wise point out the faults with this naive idea.
The biggest problem I see is that people need to volunteer to take up the responsibility, without making a personal profit over and above savings made.
If someone with the know-how can set up a website that will facilitate resident groups all over the island to make this feasible, I think it will be a big plus to Singaporeans.
On another note, is it possible for someone with the information to publish the wholesale prices of household products on TOC?
VMan
Who would think that there is so much to read into the price comparisons done by ST or the likes of independent organisations like CASE. People really need a much fairer, unbiased source of information on the price of essential (for a start) goods to make intelligent choices. I think, an independent site which allows for anyone to update the information (like WIKI) may be the answer. I must admit this is not a perfect solution at least initially as the integrity of the information is dependent on the no of people updating the information. But over time as the site becomes popular and more and more people across all corners of Singapore access and ‘correct’ the information it can be a ‘trust’ worthy site. Just my thoughts.
True Union
I just wonder if the major importers are also the same major retailers, and they can simply adjust the wholesale prices “creatively” to appear “FAIR”.

Finally, why did the survey not cover White Rice, which is cheaper than Fragrant Rice (which the survey said was selected because it was more popular)?
Being more popular should not mean that we do not cover it at all.
You mean being LESS popluar?