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Rise in hawker food prices due more to raw materials than rentals: MTI study

Tuesday, May 26, 2015 - 09:27
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Hawker food prices are driven up more by increases in the cost of raw materials than by raises in rent, a Ministry of Trade and Industry (MTI) study has shown.

HAWKER food prices are driven up more by increases in the cost of raw materials than by rent hikes, a Ministry of Trade and Industry (MTI) study has shown.

According to the report released on Tuesday, the largest cost component for hawker stalls is raw material costs, which account for 59 per cent of their total costs on average. Manpower and rental costs, on the other hand, account for much smaller shares of 17 per cent and 12 per cent of total costs, respectively.

"In terms of the pass-through of costs to hawker food prices, our analysis shows that food prices are more sensitive to raw material costs, compared to other cost components including rental costs," said the report's five contributors.

"Furthermore, we find that demand factors are likely to influence cost pass-through, while competition by stalls selling the same type of food within a hawker centre may have a dampening effect on food prices."

The authors added that MTI and the National Environment Agency are developing an online platform to publish the prices and locations of affordable hawker food. 

This will "enhance the dissemination of information on low-cost hawker food options … (and) allow comparability of prices, and play a part in further moderating food prices".

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