5
178
23. On the 19th September an Ordinance was passed providing for the acquisition disposal of Rice by the Hongkong Government, and for validating acts previously one. The Ordinance is printed as Appendix III to this report.
and it was notified that the Government would be prepared to buy rice at $10.142 picul. It has been the custom for the New Territories to export their rice and brand cheaper rice in Hongkong for their own use. In the abnormal conditions prevailing the year this practice had to be abandoned.
16. An endeavour was made to obtain rice from Kuangtung, and after much corres pondence the Government at Canton permitted the export of 10,000 piculs of Wuhu by the Kuangtung Food Relief Association to the Tung Wah Hospital at Hongkong at t price of $6.70 a picul. The Tung Wah Directors showed great energy in erecting. number of matsheds in Victoria, Shaukiwan and Aberdeen where many thousands of very poor people were supplied free of cost with a mixture of boiled rice and salt, ka as congee, twice a day. This system of relief continued for several weeks and was most useful in preventing a great deal of distress.
17. An attempt was also made to get rice from the Hunan Province of China rid Shanghai. H. M. Minister at Peking and the Consul at Changsha did all they could and the Government at Peking was favourable to the project, but owing to the stipula tions of the Governor of Hunan the price demanded was prohibitive so that the offen made had to be refused.
18. The Indian Government sanctioned the export of 3,750 tons of rice from Rangoon and this rice has recently arrived in the Colony. Through the generosity of the firm of Messrs. Nemazee & Co., about two-thirds of this rice is being carried free of freight to Hongkong.
19. Appendix II shows the total amount of rice purchased by the Government up to the 30th September, the only further purchase being necessitated in November in order to comply with the terms of a contract for the sale of rice on consignment to America. This will be dealt with at a later stage of the report.
20. The rice purchased was divided into three classes under the designations Hong kong No. 1, No. 2, and No. 3, and the recommendation of the Committee to fix the price of the three grades at 20, 16, and 12 cents a catty respectively was adopted. These prices were altered a few days later to suit the usage of Chinese buyers to 5 catties=$1.7 catties-$1, and 9 catties-$1, and before the end of August the price was further reduced to 5 catties-$1, 7 catties = $1, and 10 catties = $1. No. 1 rice was Saigu round or long, No. 2 a mixture of Saigon round or long with an equal amount of broken rice, and No. 3 a mixture of one-fifth Saigon round or long with four-fifths broken rice.
21. Sales of Government rice took place up to the 3rd September as follows:-
No. 1
No. 2
No. 3
-
2,853 piculs. 8,838 56,124
11
About the 3rd September sales suddenly ceased and it was found that rice had begun to come into the Colony from Kuangtung. An excellent quality of rice was thus available for consumption in the Colony at the comparatively low price of $8 a picul.
29. In view, however, of the appearance of this rice on the market, the question immediately arose as to what was to be done with the rice imported by the Govern ment and bought locally. Some of the latter already showed signs of deterioration and it was decided to sell the rice bought in the New Territories at $8 a picul and to make enquiries as to the best markets in which to sell all the remainder with the exception of a few thousand tons. Japan had ceased to buy any rice in Hongkong and the Straits Settlements did not require any. The sterling value of the dollar had continued rising so that the price to be obtained in countries with a gold standard was becoming less when reckoned in dollars. Eventually arrangements were made to sell 10,000 tons on consigument to America and about the same amount locally. A careful examination of the rice stored in the godowns in Victoria showed that much of it was discoloured and full of weevils, but notwithstanding this prices were obtained which were quite good consider ing the state of the market. In fact the sales were made just in time to avert very seriou losses indeed owing to the rice becoming practically unsaleable.
F
24. The lists of rice purchased showed certain quantities of Saigon round and Saigon long rice, and on these lists the contract mentioned above for the sale of 10,000 sons to America was calculated. It specified 6,500 tons of Saigon round and 3,5(K) tons of Saigon long, but when the rice came to be sifted to prepare it for export it was found that only 500 tons of the long rice existed, the remainder being round. As the Fire had already been sold in America the consignees there refused to alter the amounts of each class contracted for and it was necessary to go into the market and buy 3,000 tons of long rice to make up the necessary amount. This was effected at a price of about $13.50 a picul, which meant a loss on the net price obtained in America of about $1.75 a picul. The 3,000 tons of discarded round rice were subsequently sold at about the same price as would have been obtained in America.
25. A report was called for as to how the confusion between long and round rice had arisen. It appeared that originally the books were made out to show the different qualities of rice, long, round, and broken, and any other grades used on the foreign market, but as this classification was unnecessary for local sales no distinction was sub- sequently made between long and round rice as the price was the same, and the books were drawn up accordingly. The error caused a loss of nearly $140,000 on a purely technical point of difference in making the contract with the American buyers.
26. The cost to the Colony of the transactions in rice up to the end of the year 1919 will be well over $2,000,000. The price of the rice bought at Saigon was much enhanced by the high rate of discount on the Hongkong dollar at Saigon. The cost of 13,750 tons in Saigon currency was $3,072,300, the equivalent in Hongkong currency being $3,766,211, a difference of $693,911. When negotiations were begun for selling rice to America the rate of exchange was about eighty gold dollars for one hundred Hongkong dollars, and when the exchange was fixed it had risen to uinety-five gold dollars for one hundred Hongkong dollars. The rice was sold at 205 gold dollars a short ton for 10,000 tons and the difference in the amount to be received at exchange of 80 and 95 is $401,605 the figures being as follows:-
10,000 tons @ G. $205 a ton
@Exchange of 80
95
13
$ 2,562,500 2,157,895
$ 401,605
Freight to America also rose from G. $15 to G. $25 during the same period. The balance of the total loss incurred on the purchase and sale of rice is made up of actual reduction in the price at which local sales had to be made of rice bought locally, rent of godowns, freight on rice from Saigon and Rangoon, commissions on sale of Government rice, interest on overdraft, and insurance. All these charges will be shown in the final
account.
27. It will be clear from the above that whatever sum in dollars representing the loss is eventually arrived at will scarcely indicate the real facts. The Colony has been receiving during the past four months a supply of excellent rice from Kuangtung at a low price, but it is more than probable that if the Government rice had not been here a considerably higher price would have been demanded. The indirect advantage to the Colony of the policy of non-interference with the ordinary rice trade cannot be reckoned in dollars, but the gain is so manifest that the policy requires no justification.
28. When it became clear that there was no other course open than to sell the bulk of the rice which had been purchased with the least possible delay, the Government sought the advice of those connected with the rice trade, who were in a position to help. Mr. Barretto of the firm of J. M. da Rocha & Co., Messrs. E. A. Beaumont & Co., Messrs. Loxley & Co., and the Hongkong Mercantile Company all gave valuable assistance without which it would have been very difficult to effect satisfactory sales. In the work during August of mixing and selling the graded rice Mr. R. O. Hutchison, Mr. Taylor of
13
0000
No comments yet.
Private notes are available after approval.