BE PREPARED to spend 10 per cent to 20 per cent more on foodstuffs this Chinese New Year.

Suppliers, manufacturers and retailers have told The Straits Times that the costs of basic ingredients for festive goodies such as pineapple tarts, love letters and kueh bangkit have gone up.

Those in the trade cite the same reasons for the price hike: Increases in raw material costs and in operational costs from higher fuel prices.

While some retailers say they will pass on some of the costs, others have chosen to absorb them to keep their regular customers.

However, the higher prices may not dampen demand in this market, estimated to be worth $10 million a year.

At Poh Guan Cake House, for example, business has been 'comparable' to last year despite the boxes of goodies costing $1 more each. Owner Chan Kim Ho said: 'I am not worried that demand will be affected. In fact, we are swamped with orders.'

Glory Food Products managing director Andrew Chin said: 'The prices have gone up for everything - oil, sugar, butter. And flour - that is the worst.'

Mr Png Geo Lian, chairman of the Association of Chinese Wheat Flour Merchants of Singapore, said flour prices jumped thrice last year. A 25kg bag which cost $20.40 in August now costs $30.90.

The 50 per cent increase is the result of a worldwide shortage of wheat caused by severe droughts and crop delays in Australia, the United States and Canada.

Mr Chin, saying that Glory products will cost 10 per cent more, said: 'I have no choice but to cover my costs.'

Even Ban Hock Trading, which has kept prices on its line of goodies steady for 15 years, can no longer do so.

Accounts executive Melissa Lau said prices will be 10 per cent to 20 per cent higher.

'The increases have been too tremendous. In 1994, cooking oil cost 28 cents per litre. It is $1.20 now,' she said.

At Bengawan Solo, 80 per cent of the products will cost 6 per cent to 8 per cent more, said director of business development Henry Liew.

He said: 'We feel we have to adjust our prices, but even so, it won't cover our cost increases.'

Poh Guan Cake House's Mr Chan said many customers were regulars, 'so I won't want to raise prices too much'.

Both NTUC FairPrice and Cold Storage supermarkets have kept the prices of festive goodies sold under their house brands steady, but have raised those under other brands by between 10 per cent and 25 per cent.

Price increases have also hit Mandarin oranges and Chinese sausages.

Mr Tan Chin Hian, managing director of Ban Choon Marketing, a leading fruit importer here, said the oranges will cost about 10 per cent more as a result of higher freight charges and the appreciation of the Chinese yuan.

An 8kg carton of Mandarin oranges will cost $14, up $1.

Marketing manager Angela Goh of manufacturer Golden Bridge said a kilogram of Chinese sausages will cost $2 this year, 10 per cent more.

Among retailers who have chosen to absorb the price hikes is Upper Cross Street shop owner Choong Tzien Tao, who said: 'Since it is not very drastic, I would maintain the same price rather than risk losing my customers.'

linxinyi@sph.com.sg

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