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Gradual liberalisation of rice trade
Following is a question by the Hon Fred Li Wah-ming and a reply by the acting Secretary for Trade and Industry, Mr Francis Ho, in the Legislative Council today (Wednesday):
Question:
As the Government is reviewing the Rice Control Scheme which has been in existence for forty-one years, will the Government inform this Council:
(a)
(b)
(c)
Answer:
Mr President.
whether it has assessed the impact of the liberalisation of the rice import trade on the price of rice; if so, what the outcome is; if not, why not;
why it has suggested in a paper submitted to this Council in May that a reserve stock should be maintained to cater for 45 days' consumption. whereas in the consultation paper issued by the Government in February this year, it was stated that one month's reserve stock of rice should be adequate; and
as about 80 per cent of rice in the territory is currently imported from Thailand, what measures the Government will adopt to identify more suppliers so as to reduce the risk of over-reliance on a single market?
The Rice Control Scheme was introduced in 1955 with the objective of ensuring a regular and adequate supply of rice to consumers at reasonably stable prices, and to provide a reserve stock to cater for emergency situations or any short term shortage of supply. The Scheme has achieved this objective and served the community well during the past forty one years.
The Administration has recently reviewed the Scheme. Theoretically, if full liberalisation of the rice trade leads to a highly competitive market, consumers will benefit. However, such a situation cannot be taken for granted. Full liberalisation in haste may result in market confusion, price instability and even a highly anti- competitive situation in which the market is dominated by a few stockholders. We will therefore adopt a gradual approach in liberalising the rice trade so as to allow the market to adjust to an increasingly competitive environment. Initially, this will be achieved by a gradual increase in the number of stockholders this year and introduction of an optional quota system next year.