up our reputation over the years as a reliable cash customer of a reliable source of supply. I felt sure that when the Government of Thailand felt able to relax its ban, Hong Kong would be accorded a reasonable measure of priority for purchase of available stocks of suitable quality. This is in fact what happened. A special preferential allocation was made to tradi- tional customers in the second half of December, of which our registered importers secured a major share. And on 17th January, the Thai Govern- ment directed that exports of rice to Hong Kong, Malaysia and Singapore should henceforth be a minimum-and I stress the word minimum-of 45,000 tons of rice a month. This is enough to ensure that our stocks of rice will not run down further, and could allow for a modest build-up during the seasonal reduction of demand which follows the New Year and which warmer weather normally brings.
I should add that at no time did the ban on exports from Thailand inhibit exports of rice already contracted for, so that during November and December steady but diminished shipments from Bangkok to Hong Kong continued. And at no time have imports from China, our second major supplier, faltered.
Resumption of large scale exports from Thailand has resulted in no less than 16,000 tons of rice being unloaded last week from ships in the port. That is about half the quantity usually consumed in a month. This most useful accretion to stocks will go quite a long way towards making good the ground lost over previous months. It should in due course have a significant effect on prices to the consumer.
I have so far emphasized the matter of supplies and stocks of rice, because the paramount objective of the rice control scheme is to have rice always available. To do this costs money, which the consumer must provide. And it costs more money, if the consumer wishes-as indeed he does, and has since 1953 been able to afford to do, to exercise his pre- dilection for rice of a particular quality. The statistics in the Rice informa- tion paper demonstrate how, during the last five years, the average con- sumer has registered his preference for rice of high quality and his ability to pay for it; the statistics also show his interest in more expensive sub- stitute foods. What the statistics do not demonstrate, but what more detailed knowledge of the rice market does show, is the importance he attaches to assurance that supplies are available. Allowing for known commercial factors, a comparison with consumption in previous years discloses an abnormal increase in demand during the last three months.
iv
I can only assume that this was because of some nervousness about continuing supply. I have not shared this nervousness.
Registered Rice Importers
My reason is that I have confidence in the rice control scheme, and the ability of our registered importers. And this leads me on to consider the principal criticisms of the scheme, which can be summarized as that it is wrong in principle for a selected group of merchants to have a mono- poly of rice imports, and that the existence of such a 'monopoly' has enabled registered importers to rig prices in such a way as to secure an unreasonable commercial advantage at the expense of the consumer.
Let me here and now state that I agree that it would be unusual for a Government to permit a monopoly of the right to import a basic foodstuff, just as I think it is dangerous in practice to become dependent on a single source of supply. But placing import in the hands of 38 merchants who have traditional ties with different sources of supply; who have access in varying degree to credit which would enable them to maintain stocks; and who, although sharing a particular expertise, deal in different ways commercially such an arrangement is very far from being a monopoly. If there were no controls, I am convinced that we should have far fewer regular importers.
The existing diffusion of the right to import rice, with its consequent obligation to hold stocks, is designed to have its own internal checks and balances. They have worked. The rice control scheme has by and large over the last twelve years operated effectively; rice has been bought from a variety of sources, and when one has dried up, another has been found; we have never been short of rice of a quality acceptable to the consumer. This could not have been accomplished were it not that import was in the hands of experienced merchants who were in a risky trade-of course for profit, but for long term rather than short term profit--and who were able to take the rough with the smooth. It would be quite improper for Government to hand over the import of so vital a basic commodity to inexperienced merchants who are ready to jump in when profits are high and equally ready to jump out when profits are low. This we have not done and are not prepared now to do.
Prices-1962 - October 1966
But honourable Members may well ask whether rice has been sold to the consumer at a reasonable price? And have registered importers made inordinate profits? My answer to the first question is: 'For the most part,