(b) Consumption (By Grades)
The figures in Appendix V (b) show that the proportion of better quality rice consumed has risen considerably over the years, and the proportion of low grade rice (brokens) diminished until the trend was reversed in 1965, when credit became tight and Chinese rice of longer whole-grain-content became more readily available.
(c) Consumption (Per Capita)
From 1956-58 per capita rice consumption was fairly constant. In 1958 it reached a peak, decreased slightly in 1960 and then more ap- preciably from 1961 onwards. The continued rise in the standard of living has resulted in an increase in the per capita consumption of meat, fish and other relatively more expensive foodstuffs and in a very striking decrease in the consumption of rice, of the order of 20% compounded in the last five years. The trend is illustrated in Appendix V (c).
(d) The Place of Rice in Household Budgets
The Household Expenditure Survey for 1963-64 established that the average household (by and large, households with an income of less than $500 a month) spends between 52% and 60% of its income on foodstuffs, 74%-9% being spent on rice. In 1947, when the Government rice ration scheme was in operation, there is some evidence to suggest that the average white-collar household spent about 17% of its income on rice out of a total of 55% on foodstuffs. The average household was then poorer in real terms, and the share of its income spent on rice was, proportionately, probably nearer twice or three times as great as it is today, when not only is the per capita consumption of rice, but also the absolute consumption of the whole Colony, declining.
As regards other essentials, the survey estimated that the average household spends between 11.8% and 13.4% on housing (it was 10% in 1947 for white-collar employees); between 4.4% and 6.6% on educa- tion (1947, 4%); on clothing between 3% and 5.2% (nearer 8% in 1947). The cost of rice, therefore, although of great importance to the consumer, is much less conspicuous in his budget than it used to be, partly because of its relative cheapness now and partly because people are better off in real terms and are able to afford more expensive substitute foods.
Appendix VI contains an extract from 'The Household Expenditure Survey 1963-64 and the Consumer Price Index' published by the Govern- ment Printer on 1st April 1965, which illustrates the relative importance of rice in the budgets of households at different income levels.
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5. PRICE MOVEMENTS (1962-66)
Rice is bought in a great variety of types and grades, but by and large movements in the prices of the two grades of Thai white rice known in the trade as 5% broken and 100% broken Al Super indicate the movements of top and low grade rice. A summary of average annual end-month c.i.f. prices for these two typical grades of Thai white rice and of the corresponding selling prices by importers to wholesalers is at Appendix VII (a) and (b). Conclusions drawn from figures for prices must be cautious, because their validity is relative rather than absolute. Prices for China rice in the local market follow the trend set by Thai rice import prices but tend to be slightly higher.
The same tables record the average retail price of roughly equivalent retail grades over the same period. These prices may be considered indicative of the trend of retail prices generally, but the correlation is far from exact because of the practice adopted by retailers of blending different qualities of rice to minimize apparent price changes.
Appendix VIII (a) and VIII (b) are graphical representations of the moving three monthly average of the end-month prices used to prepare the annual averages recorded in Appendix VII. The curve for c.i.f. import price has however been shifted to the right by the equivalent of three months, i.e. the approximate average theoretical time between the date at which rice is purchased and the time the same rice is sold in Hong Kong. Moving averages have been used as they help to even out inevitable statistical shortcomings that arise from different prices being quoted for different qualities, new crop and old crop, etc.
Interpretation of the figures in Appendices VII and VIII are beset with statistical pitfalls, but in the light of more detailed information available in the Commerce and Industry Department one generalization can be made with some assurance. It is that broken rice has been more profitable than white rice for all sectors of the trade over the years 1962 to date. There has, however, as had been noted earlier, been generally a declining trend in the quantity of 100% broken rice consumed, until in 1964 it was only about 12.7%. In 1965 and 1966 the percentage in- creased sharply again. There are several explanations for this greater availability in the source of supply, Thailand; improvement in the quality of whole rice imports from China, leading to more admixture with whole rice in retail shops to meet demand for middle grades; tighter money all round; and of course greater profitability. All these factors
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