Factors that Caused Recent Increase in Price of Eggs
Ministry of Trade and IndustrySpeakers
Summary
This question concerns Assoc Prof Daniel Goh Pei Siong’s inquiry regarding the factors behind rising egg prices and potential profiteering. Minister for Trade and Industry Chan Chun Sing attributed these price movements to fluctuations in import costs, exchange rates, and logistics, managed through supply diversification and maintaining a strong currency. He highlighted that while some import prices surged by 50%, retail prices only increased by 4% due to the availability of stable alternative sources. The Minister clarified that there is currently no substantive evidence suggesting that anti-competitive practices or unethical profiteering caused the price hike. He concluded by inviting the submission of any evidence to the Competition and Consumer Commission of Singapore for formal investigation.
Transcript
59 Assoc Prof Daniel Goh Pei Siong asked the Minister for Trade and Industry what has caused the increase in the price of eggs in the past six months and whether profiteering has been a factor.
Mr Chan Chun Sing: The price of eggs, and for that matter any particular food item, is determined by a combination of factors, including import prices, exchange rates, logistics costs and profit margins which suppliers can command.
To safeguard consumers' interest against sharp and erratic price changes, we must adopt a multi-prong strategy:
a. First, we must continually and consciously diversify our supply sources and supply chains to avoid being held ransom by the discontinuity in any particular supply source or disruption to any supply chain. This includes sourcing from different countries and building up a certain amount of local capacities where we can and when it makes economic sense.
b. Second, we maintain a stable and strong Singapore Dollar for the benefit of our consumers and to preserve Singapore’s purchasing power.
c. Third, we maintain an open competitive market structure to prevent any unethical profiteering.
In the specific instance of eggs, the import prices of eggs from some of our import sources have indeed gone up significantly between June and November 2018, by up to 50%. However, we also have other import sources where the import prices have either remained stable or shown slight declines of up to 7%. As such, the local retail price of eggs has increased around 4% over the same period.
To the Member's specific question, there is no substantive information at this moment for us to conclude that the recent rise in egg prices is caused by anti-competitive practices. We will continue to monitor closely. If the Member has any evidence, he can share it with the Competition and Consumer Commission of Singapore (CCCS) to investigate the matter.