Sessional_Paper_1920 — Page 6

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4. Before proceeding further it will be convenient to explain in some detail the paramount importance of the rice trade to the Colony of Hongkong. Rice is much the largest commodity dealt with in the trade returns and a large number of ships is employed in bringing it to the Colony and in carrying it away after it has been dealt with. The handling of the cargoes both at the ships and on shore gives employment to a large portion of the floating population as well as to a large number of the coolie class. The companies and individuals who own godowns also derive great benefit from the storage of the rice while in course of preparation for export. For the year 1918 the value of the rice imported was no less than £12,904,321, while the exports for the same period were valued at £11,608,509.

5. As has been often pointed out the Colony of Hongkong is in the unique position among the great ports of the Empire of producing practically no raw materials, but on the other hand of possessing in its geographical situation and in its splendid harbour unrivalled opportunities for dealing with an immense transhipment trade. It is in fact in the nature of a great wharf and godown where every class of goods can be handled expeditiously provided the machinery for doing so is kept at the highest pitch of effi- ciency and without any unnecessary restrictions retarding smooth working. Nothing could be more fatal to local trade than for an impression to be created in the great markets of the world that the Hongkong Authorities might place obstacles in the way of the quick despatch of cargoes, or interfere with contracts connected therewith.

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6. With regard to the rice trade a step in the right direction was taken not long ago by the standardizing of rice by the Exporters and Dealers Association of Hongkong, in accordance with the repeated request of the California Rice Association. Prior to the adoption of this measure no limit was placed upon the amount of broken grains mixed with good whole rice, with the result that serious complaints came from American buyers. It is expected that the action taken by the Exporters and Dealers Association will have the effect of restoring confidence among buyers in America and elsewhere, whereby this valuable trade will be retained in Hongkong.

7. The bulk of the imported rice comes from Saigon and Bangkok, and is usually packed in single gunny bags of about 160 catties weight (213 lbs.), and, with the exception of some shipments to Japan, is never re-exported from Hongkong in the original bags. The principal grade of rice exported is known as "Siam usual", and is ordinarily made from a mixture of Siam rice and Saigon long rice in equal parts. Before mixing, the rice is screened so as to bring the amount of broken grains down to the standard. In the case of brown rice, especially when the season is advanced, it is the custom to winnow the rice before packing as it generally contains a quantity of dust and husks. The American market takes rice in 100 pounds double gunny bags and sometimes in double bags of 240 pounds. The Cuban market also takes the latter packing, but shipments intended for South America are usually packed in double bags of 193 pounds gross weight. It is this work of standardizing and re-packing, which makes the trade of such importance and gives employment to the large number of persons referred to in paragraph 4.

8. There is only one crop a year in Siam and Indo-China, the Siam crop being avail- able in December and January and the Saigon crop about a month or so later. Rice is, however, exported from Hongkong all the year round according to demand. Japan has been recently the largest customer, the United States of America coming next. Until a short time ago shipments for the Cuban market went to the Pacific ports of the United States, and were transhipped thence to their destination; but latterly Cuban buyers appear to have preferred to make direct shipments.

9. It will be clear from the account given in the foregoing paragraphs that the situation presented considerable difficulties, and the receipt of a telegram on the 14th June from H. M. Chargé d'Affaires at Bangkok to the effect that the Government of Siam had prohibited the export of rice from Siam as from the 12th July except under licence did not tend to improve matters. The price of both Siam and Saigon rice continued to rise the former to $15 a picul and the latter to $13 a picul, the poorer grades being rather less. To show how sensitive the feeling was in other countries it may be menționed that on the 26th June a telegram was received from H. M. Minister at Tokyo stating that the Japanese Minister at Bangkok reported that transhipment of rice at Hongkong was to be prohibited shortly and enquiring whether the report was correct.