SINGAPORE: Some local vegetable farms may have to raise prices by up to 10 per cent as soon as six months from now, as the ongoing conflict involving Iran drives up global energy and fertiliser costs.
Even then, farmers warn they may struggle to stay afloat.
For now, many say they are trying to cushion the impact on both their businesses and consumers by cutting costs and adjusting operations.
The United States-Israel war against Iran has disrupted oil and gas supplies, particularly through the Strait of Hormuz – a critical shipping route through which about 20 per cent of global energy passes.
The narrow waterway also handles around a third of global seaborne fertiliser trade. Attacks on natural gas facilities, which fertiliser production relies heavily on, have also disrupted output, with some plants in the Gulf and beyond reducing or halting operations.
This is putting pressure on global agricultural production and threatening food supply chains.
The knock-on effects have reached farmers in Singapore, with fertiliser prices rising by as much as 30 per cent, even for supplies sourced locally or from Malaysia.
At SG Veg Farm in Admiralty, fertiliser costs are a growing concern.
The rooftop farm atop a HDB multi-storey carpark imports fertiliser in small batches due to space constraints, maintaining only about two months’ supply. This means it lacks the benefit of bulk pricing and remains exposed to price volatility.
“Every two months, we need to make a purchase of fertiliser. This means we are subjected to any hike in prices,” said the farm’s founder Eyleen Goh, noting that about 10 per cent of monthly operating costs is spent on fertiliser.
“We looked at the prices of many different nutrients ... they all increased, especially urea.”
Urea is the world's most widely used fertiliser.
Switching to alternative sources is also “very difficult”, added Ms Goh, pointing to factors such as suitability, cost and the need to order in bulk.
The farm grows leafy greens such as spinach, basil, chye sim, kang kong and bok choy.
While fertiliser costs are beyond her control, Ms Goh is exploring ways to reduce other expenses over the next six months, including redesigning the farm to optimise space and rely more on sunlight to cut electricity use.
She said the farm is trying to avoid passing costs on to consumers – over fears that already low demand could drop even further – but may eventually have no choice.
“If the prices increase continuously, there's no way we can sustain all of this,” she told CNA.
“We are a very small commercial farm and … we are (already) operating at kind of very close to breakeven. We don’t have the luxury of buffering any price increases.”
At Jurong-based Vegeponics, the farm said it has enough fertiliser stock for the next six to nine months.
However, its immediate pressure comes from higher fuel prices that are pushing up transport and electricity costs.
Vegeponics farm says higher fuel prices are pushing up transport and electricity costs.
The farm, which grows vegetables including kale, lettuce, ice plant, kai lan and tang-oh, alongside imported produce from Australia and Malaysia, has already seen about a 10 per cent drop in monthly profits.
Third-party logistics providers are charging about 20 per cent more per trip to distribute its greens, and the farm is absorbing these costs for now.
“If (the war) drags too long, maybe in six months’ time, we will have to review our pricing. And if the electricity costs go up by quite a bit then we probably have to pass it on to the consumers,” said the farm’s general manager Jesper Fan.
Still, he said any price increase would be kept minimal to remain competitive against cheaper imported produce.
In the meantime, Vegeponics is looking to share transport logistics with partners to reduce costs.
Meanwhile, Meod Farm in Lim Chu Kang is taking a different approach by increasing its minimum order size to manage rising delivery costs of around 20 per cent.
The farm, which produces varieties of lettuce, mushrooms and Asian greens, has doubled its minimum order from S$40 (US$31) to S$80 this week.
Workers weigh and package vegetable at Meod Farm in Lim Chu Kang. The farm is bracing for higher costs of imported seeds and fertiliser in the coming weeks and months.
“We tell (our customers) that the minimum order quantity must be increased because we don't increase the price. At least we can reduce our distribution cost this way … and we can absorb the impact,” said the farm’s managing director Ong Boon Chuan.
The farm imports seeds and fertiliser from Europe and Turkiye, and its suppliers have already warned that the next shipment will be more expensive.
“We still have some stock balance, so the impact is not immediate, and we still have some room to breathe. But imported materials will definitely (soon be) affected by shipping and insurance costs,” Mr Ong noted.
Farmers say the full impact of rising costs will only be felt in the coming months as existing supplies run out.
They also emphasise that the situation underscores the importance of food security in import-dependent Singapore.
“Outside Singapore, there’s a lot of uncertainty. Food (import) stability depends on a lot of factors,” said Mr Ong.
“I hope more people will treasure Singapore farmers and support local farming. This will (ensure a more) stable supply for Singaporeans.”
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Even then, farmers warn they may struggle to stay afloat.
For now, many say they are trying to cushion the impact on both their businesses and consumers by cutting costs and adjusting operations.
GLOBAL DISRUPTIONS RIPPLE INTO AGRICULTURE
The United States-Israel war against Iran has disrupted oil and gas supplies, particularly through the Strait of Hormuz – a critical shipping route through which about 20 per cent of global energy passes.
The narrow waterway also handles around a third of global seaborne fertiliser trade. Attacks on natural gas facilities, which fertiliser production relies heavily on, have also disrupted output, with some plants in the Gulf and beyond reducing or halting operations.
This is putting pressure on global agricultural production and threatening food supply chains.
The knock-on effects have reached farmers in Singapore, with fertiliser prices rising by as much as 30 per cent, even for supplies sourced locally or from Malaysia.
SMALL FARMS MOST EXPOSED
At SG Veg Farm in Admiralty, fertiliser costs are a growing concern.
The rooftop farm atop a HDB multi-storey carpark imports fertiliser in small batches due to space constraints, maintaining only about two months’ supply. This means it lacks the benefit of bulk pricing and remains exposed to price volatility.
“Every two months, we need to make a purchase of fertiliser. This means we are subjected to any hike in prices,” said the farm’s founder Eyleen Goh, noting that about 10 per cent of monthly operating costs is spent on fertiliser.
“We looked at the prices of many different nutrients ... they all increased, especially urea.”
Urea is the world's most widely used fertiliser.
Switching to alternative sources is also “very difficult”, added Ms Goh, pointing to factors such as suitability, cost and the need to order in bulk.
The farm grows leafy greens such as spinach, basil, chye sim, kang kong and bok choy.
While fertiliser costs are beyond her control, Ms Goh is exploring ways to reduce other expenses over the next six months, including redesigning the farm to optimise space and rely more on sunlight to cut electricity use.
She said the farm is trying to avoid passing costs on to consumers – over fears that already low demand could drop even further – but may eventually have no choice.
“If the prices increase continuously, there's no way we can sustain all of this,” she told CNA.
“We are a very small commercial farm and … we are (already) operating at kind of very close to breakeven. We don’t have the luxury of buffering any price increases.”
FUEL AND LOGISTICS COSTS HIT PROFITS
At Jurong-based Vegeponics, the farm said it has enough fertiliser stock for the next six to nine months.
However, its immediate pressure comes from higher fuel prices that are pushing up transport and electricity costs.
Vegeponics farm says higher fuel prices are pushing up transport and electricity costs.
The farm, which grows vegetables including kale, lettuce, ice plant, kai lan and tang-oh, alongside imported produce from Australia and Malaysia, has already seen about a 10 per cent drop in monthly profits.
Third-party logistics providers are charging about 20 per cent more per trip to distribute its greens, and the farm is absorbing these costs for now.
“If (the war) drags too long, maybe in six months’ time, we will have to review our pricing. And if the electricity costs go up by quite a bit then we probably have to pass it on to the consumers,” said the farm’s general manager Jesper Fan.
Still, he said any price increase would be kept minimal to remain competitive against cheaper imported produce.
In the meantime, Vegeponics is looking to share transport logistics with partners to reduce costs.
FARMS ADJUST STRATEGIES TO COPE
Meanwhile, Meod Farm in Lim Chu Kang is taking a different approach by increasing its minimum order size to manage rising delivery costs of around 20 per cent.
The farm, which produces varieties of lettuce, mushrooms and Asian greens, has doubled its minimum order from S$40 (US$31) to S$80 this week.
Workers weigh and package vegetable at Meod Farm in Lim Chu Kang. The farm is bracing for higher costs of imported seeds and fertiliser in the coming weeks and months.
“We tell (our customers) that the minimum order quantity must be increased because we don't increase the price. At least we can reduce our distribution cost this way … and we can absorb the impact,” said the farm’s managing director Ong Boon Chuan.
The farm imports seeds and fertiliser from Europe and Turkiye, and its suppliers have already warned that the next shipment will be more expensive.
“We still have some stock balance, so the impact is not immediate, and we still have some room to breathe. But imported materials will definitely (soon be) affected by shipping and insurance costs,” Mr Ong noted.
CALLS TO SUPPORT LOCAL FARMS
Farmers say the full impact of rising costs will only be felt in the coming months as existing supplies run out.
They also emphasise that the situation underscores the importance of food security in import-dependent Singapore.
“Outside Singapore, there’s a lot of uncertainty. Food (import) stability depends on a lot of factors,” said Mr Ong.
“I hope more people will treasure Singapore farmers and support local farming. This will (ensure a more) stable supply for Singaporeans.”
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