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"Under the scheme, imports of rice for local consumption are governed by quotas. The quotas are divided among a number of companies registered as stockholders who are obliged to hold at any time 45 tonnes of rice as reserve stock for each unit of quota," he said.
"At the end of 1994, 1,000 units of quota were distributed to 46 registered stockholders. Kian Gwan Co (China) Ltd, which held 40 units of import quota, had decided not to renew its registration as stockholder from January 1995. "Since then, we have received a few enquiries on how we are going to dispose the 40 units of import quota surrendered by Kian Gwan."
The spokesman said after careful deliberations, the Trade Department concluded that there was no urgent need to invite applicants to take up these quotas for the time being.
"There are three reasons for coming up with such a conclusion," he said.
"First, although the non-allocation of 40 units means that the amount of reserve stock has been reduced from 45,000 tonnes to 43,200 tonnes, the shortfall of 1,800 tonnes is only equivalent to two days' consumption. The remaining reserve stock is sufficient for 48 days' consumption and would still be adequate for Hong Kong's need.
"Second, the non-allocation does not mean that there has been any shortfall in rice import. In effect, the amount used to be imported by Kian Gwan is shared among the existing 45 stockholders.
"Third, the rice market in terms of the sharing among the stockholders is rather pluralistic. The addition or decrease in one or two stockholders would not have any significant impact on improving and reducing competition. "Nevertheless, the department will monitor the rice market and review the situation at the end of this year."
The spokesman said the question had been discussed at the Rice Advisory Committee meeting chaired by the Director-General of Trade earlier this week.
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