Sessional_Paper_1920 — Page 5

3315/17 Pt. I.

HONGKONG.

No.

1

1920

PRELIMINARY REPORT ON THE PURCHASE AND SALE OF RICE BY THE GOVERNMENT OF HONGKONG DURING THE YEAR 1919.

Laid before the Legislative Council by Command of His Excellency the Governor, 29th January, 1920.

From the beginning of last year it was realised that owing to the extensive purchases of rice that were being made to meet an abnormal situation in the Straits Settlements and Ceylon the Hongkong rice market was sure to be affected. At the end of the year 1918 the Government received an intimation from the Secretary of State that owing to the exports from India having been restricted the Colonies mentioned were endeavouring to obtain rice from Siam, and the Secretary of State was informed on the 4th January that the Government of Hongkong had never contemplated official purchases of Siamese rice, but could not prevent local merchants from placing orders in Siam if the state of the market there was favourable. On the 13th January information was received from the Government of Ceylon that arrangements had been made for the supply of rice to Ceylon which would not necessitate buying in Siam or French Indo-

China.

2. Early in February Japan began to buy rice in large quantities in the Hongkong market, while at the same time the Government of Indo-China fixed the amount of rice for export as follows:-

February-March April May

-

-

120,000 tons.

60,000 60,000

"1

3. On the 28th of May the Secretary of State enquired whether the Government of Hongkong was negotiating for the purchase of rice from Siam, and on the 5th June he suggested that in order to avoid competitive buying in Siam the Government should prohibit importation of rice from Siam on private account as had been done in Ceylon and the Straits Settlements. In reply the Secretary of State was informed that Hong- kong was an entrepôt for a very large rice trade with all parts of the world, local firms buying as agents for all countries and buyers in foreign countries transhipping in Hong- kong. It was pointed out that if an embargo were to be placed on the importation of rice it would seem probable that the result would be to divert trade round the Colony without achieving the object in view, and that the result to the large rice trade in the Colony would be most serious. That arrangements had been made to have sufficient rice for three months local consumption always in the Colony, estimated at about 27,000 tons. That careful watch was being kept on exports the endeavour being to prevent the export of abnormal amounts to ordinary destinations and to limit the exports to countries which did not normally draw on Hongkong to the lowest limits. In these circumstances the opinion was expressed that it would be very inadvisable to impose restrictions on importation. The Secretary of State replied on the 11th June that the matter of dealing with the rice situation was left to the discretion of the Officer Admin- istering the Government.