Chart of the Day: Food inflation averaged 2.2% in 10 years

This is due to Singapore’s food inputs being largely imported from various markets.

This chart from DBS Group Research shows that food inflation hovered at 1-4% in recent years and averaged 2.2% over the past 10 years.

Singapore’s food inputs are largely imported from various markets, which help to keep inflation down, the report noted.

“Singapore sources its food supplies from various parts of the world which reduce supply shocks from specific markets. Restaurants such as Jumbo procure crabs from all over the world, from ASEAN countries to Sri Lanka and as far as Alaska,” said DBS Group Research.

“The Ministry of Trade and Industry (MTI) even has a Rice Stockpile Scheme to ensure adequate supply of rice in the market. These measures collectively help to ensure that import prices and inflation for food supplies are generally mild,” they added.

Gross margins for food remained high and stable, averaging 62-63% for Singapore-listed F&B companies over the past four years. Gross margins can typically be preserved since higher food prices can easily be passed on to customers, according to the report.