Local farms hit by rising costs are forced to raise prices, but demand is on the rise amid food security threats
SINGAPORE – Local farms are under pressure from rising operating costs and electricity prices, and many have had to raise the prices of their produce.
Despite higher prices, some farms are reporting an increase in demand for their products, in part due to recent clashes with food security threats.
Inflation and supply chain disruptions have driven up the costs of fish feed, fingerlings – or juveniles – seeds, fertilizers and logistics.
Local fish producer Barramundi Group said it was facing “skyrocketing increases” in energy, diesel and raw material costs.
“Even after hedging the decline in electricity prices before the increases, these electricity contracts will end and we will eventually see an almost tripling of our kilowatt-hour costs,” said its marketing director James Kwan.
Fish feed prices, a major cost to the group, have seen significant increases in recent months with further increases on the horizon, he added.
Barramundi Group uses feed from a Norwegian animal nutrition supplier.
Sustained cost shocks proved difficult to bear and the Barramundi Group raised prices for its products by around 15% from July 1, Kwan added.
The 14-year-old aquaculture company runs two ocean farms in Singapore’s southern waters and also has farms in Australia and Brunei.
It sells products such as locally farmed Asian sea bass and ready-to-eat seafood to businesses and individuals in Singapore.
Some of the reasons for the fish feed bounty are the disruption of the grain supply chain due to the Russian-Ukrainian war and the recent adverse weather events in some parts of the world affecting crops.
For example, the heat waves currently sweeping Europe have wilted crops in the region.
Meanwhile, Russia and Ukraine are among the largest producers of grain and other agricultural products. Russia is also one of the top three exporters of nitrogen and phosphorus fertilizers. The war disrupted the supply of these products.
A spokesperson for local vertical farm Sustenir said delays in the supply of farm equipment and rising inflation have dramatically increased the cost of doing business.