Singapore at crossroads of trade in Southeast Asia

AgExporter, May-June, 1997 by Bernard Kong

Buyers and sellers in Singapore trade food and other products from all over the world for re-consolidation and re-export to Malaysia, Indonesia,Thailand, India,Vietnam, Laos, Cambodia, Myanmar, and Brunei.With its affluence and lack of trade restrictions, Singapore is a relatively quick and easy market to enter.

Singapore is also important as a showcase for new food products for the rest of the Southeast Asian region. U.S. exporters who are interested in gaining a foothold in Southeast Asia frequently start in Singapore before moving into other countries in the region.Traders from neighboring countries often come to the Republic to investigate new, trendy food items.

Singapore One of World's Wealthiest Nations

Singapore is one of the wealthiest nations in the world. The country's per capita income exceeded $22,000 in 1996, surpassing that of Great Britain and New Zealand.

Singaporeans have money and spend it willingly on branded products. Still, consumers are generally very price conscious and want value for their money in their purchases of food and other items.

It is often said that the two national pastimes of Singaporeans are shopping and eating. In the past decade, Singapore consumers have doubled the amount they spend on food and beverages. They consumed $5.9 billion worth of foodstuffs and drinks in 1996, about half of which was spent eating out.

Singaporean children have a far different diet than their parents. Just a generation ago, most Singaporeans lived in shop houses, trying to feed large families with very limited funds. Fried rice was the daily staple of the diet.

The change in one generation has been astronomical. Teens and kids sport fashion clothing and walk down the street eating brand-name ice cream, toting cellular phones. At home, parents may still eat roti prata (Malay bread), nasi lemak (a Malay rice dish), or rice porridge for breakfast. In contrast, their children are eating cereal from the United States, bread with spreads, bacon and eggs, danish, croissants and juice. Children snack on milk and cookies and fancy cakes, while their parents often eat jellied treats accompanied by Chinese tea.

The taste buds of Singaporeans do not always agree with Western tastes. Most Singaporeans like their food spicy and hot. Meals, including breakfast, are often eaten with chili sauce or cut red chilies on the side. Popular spicy dishes include chili crab and curry fish head. Local consumers are less likely than Westerners to eat large pieces of meat and foods with heavy cheese, butter or cream sauces. Many Western foods are regarded as too sweet or salty.

Eating, Shopping Habits Changing

The eating and shopping habits of Singaporeans are changing, particularly those of young consumers and adults. Food shopping is taking place less frequently and consumers continue to eat a major portion of their meals outside of the home.

There is an increasing demand for home-delivered foods, heat-and-serve meals, semi-prepared foods, and frozen foods. These developments are due largely to the growing number of working women as well a movement away from extended family households.

The average Singaporean family can store and prepare Western-type convenience foods. About 98 percent of local households have refrigerators and 21 percent have microwave ovens. Cold milk, juice, ice cream and bakery products are fast becoming daily part of family life.

Health consciousness is on the rise due to the Government's annual month-long campaign to promote healthy living. Low-fat foods, sushi, diet beverages, yogurt, and health foods are slowly gaining prominence in retail outlets. Consumption of fruits and vegetables is also on the rise.

Agricultural Trade Rising

Singapore's agricultural imports reached $5.7 billion in 1996. Imports that stayed in the country totaled about $2.7 billion. Nearly 70 percent of all retained imports are consumer-ready products.

U.S. agricultural exports to Singapore totaled $308 million last year. Growth in exports of consumer-oriented foods has been especially strong during the past 2 years. Since 1990, U.S. exports of breakfast foods, red meats, fresh vegetables, and wine and beer have registered the highest growth.

There is very little domestic agricultural production in Singapore. Agricultural products, such as poultry, orchids and a narrow range of vegetables, are produced locally in small quantities. More than 80 percent of the agricultural products that are available in Singapore are imported.

Singapore's food processing industry is also small relative to that of other countries in Southeast Asia. Sales by firms in Singapore's food and beverage processing industry totalled approximately $2.3 billion in 1995.Among Singapore's major food and beverage processing sectors are dairy products, edible oils, alcoholic and non-alcoholic beverages, bakery products, meat processing, and chocolate confectionery.

Singapore: A Mature Market

Singapore is considered a mature market relative to other Southeast Asian countries. The market is open and is relatively easy to enter. As a result, competition is extremely intense. Products that compete with the United States come from many sources, such as Australia, New Zealand, Europe, Canada, Japan, South Africa, Argentina, Chile, Malaysia,Thailand, Indonesia and Taiwan.