Singapore, Dec. 20 - Food prices in Singapore are poised for a "sharp hike" in January as wholesalers may raise prices by up to 10 percent, the Straits Times newspaper said, a move that will fuel the city-state's 16-year high inflation.
Wholesalers are expected to raise prices of food sold to restaurants, hotels and hawkers in January when supply contracts for the new year kick in, due to higher costs of agricultural products, the newspaper said on Thursday.
"When January comes, there'll be a huge price increase," Timothy Chan, general manager of pastry maker Polar Holdings was quoted as saying in the paper.
Polar will increase the price of two-thirds of its pastries by about 5 percent in January, Chan said.
Singapore's red-hot economy, which economists expect to grow by 8 percent this year, is fighting rising inflationary pressures amid higher food, transport, housing and wage costs.
A Reuters poll this week showed that economists see rising inflationary risks in most parts of Asia, especially Singapore, Malaysia, the Philippines and Thailand, as food and oil prices surge on supply strains.
Higher food and transport costs pushed Singapore's October inflation up 3.6 percent from a year ago to a 16-year high.
Although the government expects growth in Singapore's trade dependent economy to slow to between 4.5-6.5 percent in 2008, it said annual inflation may accelerate to 5 percent early next year.
The Singapore central bank tightened monetary policy in October to rein in prices but faces the task of balancing rising inflation with the potentially devastating effects of a slump next year in the United States.
The United States is Singapore's second-largest market for non-oil exports after Europe.