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Singapore must be ready for supply disruptions due to global COVID-19 lockdowns: Chan Chun Sing

singapore must be ready for supply disruptions due to global covid 19 lockdowns chan chun sing

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Singapore needs to plan and be ready for more disruptions to its supply of food and other essentials, as lockdowns continue in exporting countries, said Minister for Trade and Industry Chan Chun Sing.

singapore must be ready for supply disruptions due to global covid 19 lockdowns chan chun sing 2
Necessities stockpile at storehouses of NTUC Fairprice.

Speaking in Parliament on Monday (Apr 6), Mr Chan noted COVID-19 has “severely diminished global production capacities and disrupted global supply chains” as countries worldwide restrict movement as well as close factories and other businesses. 

Air travel restrictions have considerably diminished global air cargo capacity and connectivity, while seaport capacities are increasingly being put under stress, he said.

Mr Chan said Singapore has a multi-pronged strategy to deal with this “unprecedented disruption” to global supply chains, with the country’s approach to ensuring its food supply including a combination of stockpiling, import diversification and local production.

“The size of our stockpile is determined by a range of factors such as our consumption rate, the supply chain reliability, resupply rate and frequency, shelf life of the products and the cost of storage, the duration of possible disruptions and our local production surge capacities,” he said. 

Maintaining the country’s stockpile of different items is a “dynamic task that requires constant watch over the fluid global supply landscape”, said Mr Chan, in response to a question from Tampines GRC MP Cheng Li Hui.

“Beyond the factors mentioned, we must also watch the rising protectionist measures by countries to secure their own supplies which compound the global supply chain disruptions,” he said.

Panic buying would also distort Singapore’s consumption rates and thus planning assumptions, he added. 

Ongoing lockdowns in exporting countries would put the ability of these countries to produce and export under “increasing strain”, noted Mr Chan. 

“For instance, while the Government has worked with Malaysia to ensure that goods, especially food and essentials, continue to flow between our countries following the implementation of Malaysia’s Movement Control Order, we cannot be certain how long this will last as the global COVID-19 outbreak continues to escalate,” he said. 

“But we must certainly plan and be ready for further disruptions.”

Singapore is working with “like-minded partners” to ensure trade continues to flow, and air and seaports remain open to support global supply chains globally, said Mr Chan.

He pointed to recent developments such as a recent agreement with countries such as Australia, Brunei and Canada to ensuring supply chain connectivity, noting also that Singapore’s trading lines with other countries such as China and South Korea remained open. 

At a G20 trade ministers meeting last week, participants agreed the world must work together to “maintain global productions systems and trade links, thereby engendering long term confidence in investors, businesses and consumers”, said Mr Chan.

“The outbreak will weigh significantly on global growth, with several major economies expected to go into recession this year. Singapore is unlikely to be an exception,” said Mr Chan. 

“The sharp fall in external demand, along with the plunge in tourist arrivals and cutback in domestic consumption is expected to severely affect the economy,” he added. 

Ms Cheng also asked about reports that suggested certain countries were trying to “hijack” the production of goods such as N95 masks, and what was being done to secure personal protective equipment for healthcare workers here. 

Mr Chan’s response was that it was to the benefit of all countries that they work together to keep supply chains open, and that countries keeping their production lines only for themselves would reduce the global capacity of goods, noting few countries produced all of their goods by themselves. 

On how the cost of goods could be kept stable during this time,  Mr Chan said Singapore would have to continue to diversify its sources, so that it is not held ransom by any particular source, adding this would need to be done even outside of times of crisis. 

Ms Cheng also asked how the “circuit breaker” measures being put into place in Singapore to curb the spread of COVID-19 – such as shutting down workplaces and attraction –  would impact the economy. 

Mr Chan said while these measures would have a “very serious impact” on the economy, it was necessary to understand why they were needed. 

“If we all remain united,  if we all take the measures seriously, and if we are successful in controlling the spread in the next one month, then we will be able to progressively resume normalcy.”

Not taking such measures seriously could make the outbreak worse, and require the “circuit breaker” period to be extended, inflicting further damage on the economy, said Mr Chan. 

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