of those items which are largely imported, this must have been a major factor accounting for the rapid increases in retail prices.
Exceptional Weather Conditions
84. But shortages of foodstuffs on world markets were not the only factor accounting for the very rapid increase in the prices of foodstuffs in the first nine months of 1973; exceptionally bad weather conditions, both in Hong Kong and the neighbouring region, also made a signif- icant impact. Normal seasonal influences have been excluded from the figures presented in this chapter, but this is not the case with the effects of seasonal factors over and above those which are usually experienced. An idea of the un- usually bad weather in the first nine months of 1973 can be gauged from the fact that, in this
Table 31
period, there was a rainfall of some 10 feet (more than in any full year this century) compared with a norm of about 7 feet; and that typhoon signals were hoisted on 7 occasions compared with 4 in the corresponding period of 1972. Supplies and prices of vegetables (Diagram 4) were particularly affected by these almost un- precedented conditions.
Retail Margins
85. Table 31 compares the rates of increase of import, wholesale and retail prices for the seven food groups shown in Table 30. It will be seen that in all cases retail prices increased at a slower rate than wholesale and/or import prices, and there is little evidence to suggest that retailers were increasing their percentage mark- ups in the twelve months to September 1973.
Increases in Import, Wholesale and Retail Prices, for Selected Groups of Foodstuffs, twelve months to September 1973
Increase in
Group
import
Increase in wholesale
Increase in
retail
price
price
price
(%)
(%)
(%)
Rice
60.2
48.2
41.6
Locally slaughtered pork
7.1*
21.6
18.6
Locally slaughtered beef
13.9
18.9
12.2
Fresh pond fish
14.8
+
12.9
Fresh marine fish
47.9
25.5
23.9
Fresh vegetables
17.1
37.3
31.2
Live poultry
16.3
5.8
12.0
* the marketing arrangements for this item are such that the import price, unlike the wholesale and retail price,
does not adequately reflect supply and demand conditions.
† very little pond fish passes through the Fish Marketing Organisation from which wholesale prices are collected.
Supplies of Foodstuffs
86. Although the rapid increase in the import prices of foodstuffs prior to September 1973 reflected shortages on world markets there was no deficiency of supplies in Hong Kong in the sense that ample supplies were available at prevailing prices. It was largely for this reason that retail margins showed no tendency to increase. How- ever, domestic consumption of several principal food items declined in the twelve months to September 1973 as is shown in Table 32. These decreases are consistent with the fact that there was a decline in 1973 in private consumption expenditure on foodstuffs, in constant price terms, and they reflect the fact that, in the twelve months to September 1973, nominal wage rates increased at a much slower rate than consumer prices, that is, that real wage rates declined in this period.
Change in Domestic Consumption* (quantities), for Selected Groups of Foodstuffs, twelve months to September 1973
Table 32
Locally slaughtered pork
Locally slaughtered beef
Fresh pond fish
Fresh marine fish
Fresh vegetables
* retained imports.
%
-6.0
-2.1
- 1.8
-2.0
-8.5
domestic production plus retained
27