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Hong Kong May End Rice Import Limit

January 7, 2000

HONG KONG (AP) _ War fears are out, free trade is in. Rice is out, hamburgers are in. And Hong Kong’s rice import controls _ imposed 45 years ago to secure a steady wartime food supply _ could soon be history.

As Hong Kong moves into the 21st century with an eye on high-technology as a future anchor of the economy, the government is considering dismantling the rigid set of rules on rice export and stockpiling.

``Older people may be upset when they don’t have rice, but the younger generations don’t really care,″ said Alan Siu, a member of the Rice Advisory Committee, which is advising the government.

``If you ask me, milk is more important because babies cannot live without it.″

At Hong Kong’s Trade Department, Principal Trade Officer Doris Chan confirmed the government is thinking of scrapping the rice rules, which were set up in 1955 to ensure a constant supply of the local staple against the background of the Cold War and political turbulence in mainland China.

``Rice supply was a main concern among citizens by then,″ Chan said.

The government intends to open the market gradually to new importers and reduce required rice reserve stocks, she said, but no date has been set for the change.

Siu, who works as an economics professor at Hong Kong University, said the rice rules are a holdover from the postwar era when Hong Kong was a British colony.

But Hong Kong was smoothly handed back to China two years ago, and if some kind of crisis were to leave Hong Kong without rice, ``China would definitely help,″ Siu said.

Land-strapped Hong Kong already relies on China for much of its food anyway, although the territory’s top source of rice is Thailand.

Throwing out the rice controls would eliminate what has become a long-standing arrangement for the local dealers, each of whom gets an import quota each year but is required to stockpile 45 percent of the supply to guard against emergency shortages.

The system keeps about 40 local rice importers in business.

The shake-up would likely bring price wars that might initially benefit consumers, with big companies likely to try to squeeze out smaller rice merchants.

Siu said an initial price drop is likely as competition intensifies, but prices ``would not drop by a mile because of certain fix cost elements,″ such as high labor costs and rent.

A standard 11-pound bag of rice now costs between $3.85 and $7.70.

Hong Kong people would also have to get used to the idea of fluctuations in the cost of an important food staple.

``But rice is a commercial product, like any other kinds of food product. We see fluctuations in vegetable prices every day,″ Siu said.

Another reason for change: Hong Kong people enjoy a more varied diet that makes rice less important.

Rice consumption has fallen in recent years as Hong Kong people turn to a more Westernized diet that includes more meat and fats, with fast-food hamburgers and french fries available all over the territory.

Hong Kong’s 6.8 million people consumed 320,000 tons of rice in 1998, a drop of 6.7 percent from 1997.

Update hourly