Consumer price index captures food price changes

SINGAPORE - We assure Mr Lawrence Loh Kiah Muan ("Are rising food prices justified?"; last Wednesday) that the consumer price index (CPI) does capture changes in the prices of food items in the household shopping basket.

Price quotes for items in the CPI basket are collected from a large number of retailers commonly patronised by households.

The CPI for food represents the average of price changes across various food items sold at the different outlets.

So, while the prices of some food items may have increased significantly at one outlet, there may also be food items (including the same food items at other outlets or other food items) where prices have increased by much less, not changed or even declined.

Specifically, using the examples that Mr Loh gave, the price of fishball noodles increased by an average of 1.8 per cent in August compared with the same month last year.

While some outlets have increased their prices by more than this magnitude, other stalls increased the price by less or maintained the price.

Similarly, during this period, the price of cakes and pastries increased by 3.4 per cent.

There were also some food items which saw a fall in prices, such as fresh mushrooms by 3.2 per cent.

On average, based on what households commonly buy, the overall food CPI increased by 2.4 per cent in August compared with the same month last year.

Foo-Wu Wen Chee (Mrs)

Deputy Director

(Consumer Price Index)

Department of Statistics

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