4 key factors contributing to inflation and here’s what can Singapore do to mitigate inflation

Singapore inflation

TL;DR – While some of these factors contributing to inflation are beyond our control, we always have the option of finding a solution to every situation that comes our way.

Most of us have been feeling the pinch from inflated prices in recent months and it only seems like inflation will continue to be a problem for now. The figures for May are not out yet, but in the last two months, there has been worsening inflation in Singapore.

The price increase comes as supply chains continue to be disrupted by four key factors:

1. Geo-political struggle between US and China

The tension between the two major powers of the world led to an ongoing trade war as both raised tariffs on each other.

This has caused prices to go up for American and Chinese consumers, but as a small city-state relying on imports, Singaporeans are also not immune to the inflation happening across the globe.

2. Covid-19 Pandemic

If the trade tariffs were not bad enough, the ongoing pandemic has also destabilised the supply chain.

Just recently, supply chains were affected once again due to a return of the COVID-19 lockdowns in China. Lockdowns inevitably cause production issues as factories are closed. Even if not in lockdown, Covid-stricken areas become short on manpower as employees take turns to be infected.

With reports about the new variant, there is really no guarantee that supply lines will be easing up for good.

3. The Russia-Ukraine War

Did you know that Russia and Ukraine accounted for about a quarter of the world’s grains?

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Unfortunately, Russia’s attack has shuttered the ports in Ukraine, creating export logistics challenges. Instead of being loaded onto ships bound for other continents, the grains are now inefficiently transported by rail to other ports for shipping.

Prices of staples have since sent soaring due to the lower supply available in the market. In fact, because grains are also often used as poultry feed, even produce prices have been affected. Just take another look at the live chicken supply situation in Singapore now.

4. Climate Change

Feeling the heat in Singapore recently? It’s not just us. While the world has been looking hopefully towards India for its wheat export, the heat wave in India has also damaged its wheat harvest.

With temperatures set to continue to rise due to global warming, it is likely that environmental factors will continue to play a part in challenging crop supplies.

Seeing that most of the key factors are external ones, this begets the question:

What can Singapore do?

After all, food is a necessity in Singapore, and price increases will affect everyone, even the vulnerable groups in Singapore. As a country that relies on heavily on food imports, Singapore has been stockpiling food supplies to ensure some buffer in times of supply disruptions.

Another step that the country has taken is to work towards the “30 by 30” Plan – to produce 30% of our nutritional needs locally and sustainably by 2030.

Some ways in which urban farming has taken shape include rooftop farming or placing farms in under-utilized spaces such as under a viaduct. Another example is how Sustenir Agriculture has utilised the method of vertical farming, which is not susceptible to seasonal changes and also reduces water consumption.

SG Food Story now on steroids: More eggs, leafy vegetables, and fish for Singaporeans, quicker too!

Know someone who would like to venture into this area and help alleviate food security in Singapore? The good news is that the Singapore Food Agency (SFA) has also introduced co-funding schemes to provide support to those who want to build and expand production capabilities and capacities.

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With these in place, hopefully, food prices in Singapore can be a tad more stable in the future!

 

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Joey Wee

Author Joey Wee

I am nice, most of the time!

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