Friday, June 20, 2008

Fairprice moving towards fairer prices?

I believe this is probably the only good piece of news i have heard this entire year. NTUC will be reducing the prices of their housebrand rice from today onwards due to savings both current and projected.

These days it seems prices only positively correlate to rising resoure/commodity prices yet some how negatively correlate to price drops. With inflation in singapore hitting record 25 year highs, some forms of inflationary easing are always welcomed.

Could the Government or NTUC do more to ease these costs? You bet. But you take what you can when you can.

FairPrice cuts housebrand prices, a sign of rice getting cheaper?
Loh Chee Kong

AFTER three months of soaring rice prices, consumers can afford to breathe
a little easier for now.

From today, the prices of eight types of NTUC FairPrice’s housebrand rice will be reduced by between 5 and 12 per cent, Singapore’s largest supermarket chain announced yesterday. This marks the first time FairPrice is cutting the prices of its housebrands since rice prices shot up in March.

A 5kg bag of its Thai Fragrant White Rice will cost $7.45, down from $8.50,
while its Thai White Rice (picture) — the cheapest type — will be sold at $6.95
for a 5kg bag, instead of $7.50. Although global rice prices peaked about three weeks ago, the price of rice had been expected to fall in recent months, as major producers in South-east Asia braced themselves for harvesting bumper crops.

But CIMB-GK economist Song Seng Wun was circumspect on whether the price of
rice would continue to drop across the board, pointing out that the initial spike was triggered by unpredictable factors such as inclement weather and panic-buying.

“At least for now, there is more stability for rice, a staple food here,” he said. “But having said that, the price of rice is still significantly higher than that of a year ago.”

On Wednesday, a survey by the Consumers Association of Singapore (Case) provided the first indications of a respite for consumers when it revealed that the prices for a handful of imported rice brands, such as Golden Peony and Royal Umbrella, had dipped. But the survey also showed that prices of housebrands had risen in the last month.

FairPrice group chief executive Tan Kian Chew added that the company was “still clearing the existing stock of rice bought at a higher price”.

Mr Tan said: “Due to our prudent buying strategy, we have managed to secure new shipments of rice at a lower price. Although the new shipments will arrive only in end July ... FairPrice is committed to pass on the anticipated savings to our customers.”

Today was unable to reach the other supermarket chains at press time, but Case executive director Seah Seng Choon said that FairPrice’s competitors might
follow suit “if they were concerned with competition”.

Still, Mr Seah added: “In the short run, there would be price rigidity and prices might not go down as much as consumers want to see. But the prices shouldn’t be going up.”

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