RICE AND SUGAR (Current trends in prices and adequacy of stocks)

Mr P. Govindaswamy asked the Minister for Finance if he will make a statement on current trends in the wholesale and retail prices of rice and sugar in Singapore and on the adequacy of stocks of these staple foods for the needs of the Republic.

The Parliamentary Secretary to the Minister for Finance (Mr S. Ramaswamy) (for the Minister for Finance): Mr Speaker, Sir, Members are no doubt aware that there is a growing rice shortage in the world. This is becoming clearer when we read of reports that rice-growing countries in Asia themselves have to import rice to meet consumption requirements. The growing general shortage was highlighted when Thailand, one of the largest rice-growing countries in the world, had to impose restrictions on exports of rice from Thailand. These restrictions had an immediate effect on the trend of rice prices. Therefore, at the end of December 1966, the retail price of Siam polished rice 100 per cent was 40 cents per katty compared with 34 cents at the end of 1965.

In recent months, the retail price has increased gradually to about 45 cents or 46 cents per katty at the end of April.

However, since the lifting of the export restrictions on rice by Thailand in January, the wholesale price of rice has shown a slight decrease. At the end of April, the wholesale price of Siam polished rice 100 per cent was $40 per pikul compared with $40.25 per pikul at the end of March.

From a position of surplus with low prices paid for raw sugar, in recent months the trend has been reversed. The price of raw sugar has been rising. Consequent on this, it is therefore not surprising that the price of refined sugar should also increase. Hence in January, the wholesale price of refined sugar per pikul was $24.25, which rose to $27.60 by the end of April. The retail price of sugar accordingly rose from 28 cents per katty in January to 30 cents per katty the following month, and it has remained at this level since.

Though Singapore does not grow its own rice and will only refine granulated sugar from raw sugar, the increases in the price of rice as well as sugar have not been as severe as in other countries of this region. This is due largely to the fact that Singapore is a large trading centre with an efficient distribution system.

Members of the House and the public will no doubt be pleased to know that there is sufficient stock, both commercial and Government, of rice and sugar adequate to meet consumption requirements for four months.

Inche Mohd. Ariff Bin Suradi (Kampong Kembangan): (In Malay): Mr Speaker, Sir, as the Parliamentary Secretary himself has admitted that the price of rice has gone up, is his Ministry not trying to increase the allowance of workers to overcome this problem?

Mr Ramaswamy: The Government will consider this matter when the productivity is increased.

Mr Ng Kah Ting (Punggol): Mr Speaker, Sir, we all know that rice and sugar are very important commodities in the livelihood of the people of Singapore. In that respect, will the Government consider ways and means of preserving stable prices for rice and sugar so that the people will not suffer from any reflection upwards or downwards by way of prices?

The Minister for Finance (Mr Lim Kim San): Mr Speaker, Sir, I do not think that it is within the powers of the Government to control the prices of sugar and rice since we do not grow these commodities ourselves. Any form of control would lead to evasion, and the moment you start controlling, there would be a black-market in these commodities. Moreover, to keep the prices stable - to follow the suggestion of the Member for Punggol - would mean that we would have to subsidise either the price of rice or sugar. I think the Member need not go very far to find out what has happened to the country that has been subsidising the price of rice.

Mr P. Govindaswamy (Anson): Do the Government or the people outside fix the prices of rice and sugar?

Mr Lim Kim San: Mr Speaker, Sir, we are known as a country which allows free enterprise and free play of prices of supply and demand. The prices of rice and sugar are not fixed by the Government. They are the results of supply and demand.

Mr Govindaswamy: Mr Speaker, Sir, suppose the private sector increases the prices, what will the Government do? Will the Government put a stop to or approve the increase in the prices?

Mr Lim Kim San: I have said that our economy is one of free enterprise, and if shopkeeper A raises the prices too high, shopkeeper B will undersell him. So the prices will be the result of the interplay of supply and demand.