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Following is a question by the Hon Fred Li and a reply by the Secretary for Food and Health, Dr York Chow, in the Legislative Council today (January 30):
Question:
It has been reported that on January 15 this year, the wholesale price of a small proportion of live pigs in Hong Kong surged by 70% to $2,400 per 100 catties. In this regard, the Secretary for Food and Health and the Financial Secretary remarked one after another that the Government would monitor the situation closely to see whether there were any improper or even unlawful activities, and the Consumer Council would also look deeply into the situation. Moreover, Ng Fung Hong indicated that due to snowfall in a number of provinces and municipalities on the Mainland, no live cattle were supplied to Hong Kong on January 17 this year. Yet, some members of the trade have pointed out to me that the fact that no live cattle were supplied to Hong Kong was due to Ng Fung Hong's failure in competing with its counterparts on the Mainland. In this connection, will the Government inform this Council:
(a) whether the investigation relating to the above surge in the wholesale price of live pigs has revealed that improper or unlawful activities were involved; if so, of the details; if not, the reasons for the surge in the wholesale price of live pigs;
(b) given that the wholesale price of live pigs has returned to the normal level a few days after January 15 this year, but the retail price remains on the high side, whether the Government has assessed if artificial "price-boosting" activities are involved; if the assessment outcome is in the affirmative, how the Government will prevent such activities; if the assessment outcome is in the negative, of the reasons for the retail price remaining high; and
(c) as members of the trade have come up with different reasons for the above suspension of live cattle supply to Hong Kong, whether the Government has conducted any investigation into this matter; if so, of the reasons for the suspension; and the measures taken by the Government to ensure a sufficient supply of live cattle to Hong Kong?
Reply:
Madam President,
There are three types of pork and beef supplied to Hong Kong, i.e. live pigs and cattle, chilled and frozen pork and beef. Although there have been some fluctuations in the supply of live pigs or cattle recently, the overall supply remains generally stable. In fact, chilled and frozen pork and beef accounts for a major portion of pork and beef consumption in Hong Kong. While only 47% of the pork consumed in Hong Kong is from live pigs, fresh beef accounts for an even smaller market share - only 19% - of all beef consumed. When there is occasional unstable supply of live pigs or cattle due to unpredictable or unavoidable reasons, the market will adjust by bringing in more chilled and frozen meat to supplement the temporary shortage of fresh meat.
The major non-staple food in Hong Kong, including fresh and frozen meat, poultry, aquatic products, vegetables and poultry eggs, comes from various parts of the world. Apart from closely monitoring the supply from the Mainland, the Government also keeps abreast of overseas situations, and maintains close liaison with the relevant government agencies and major food importers concerned. The Government will take appropriate actions when necessary to maintain stability in the overall supply of non-staple food.
Now I would like to respond to each of the question raised by the Hon Fred Li:
(a) The Government noted that there has recently been unusual fluctuation in the auction price for a small number of pigs despite a stable supply of live pigs. The Government is very concerned about any possible improper activities in the market. The Consumer Council is trying to understand the causes of the incident by studying a number of areas including: (i) every segment of the supply chain of live pigs; (ii) the auction mechanism for the wholesale of live pigs; (iii) business relationships between importers, wholesalers and retailers; and (iv) transparency of market information. The Government will offer assistance proactively in the study and continue to monitor developments closely.
(b) The scope of the above study conducted by the Consumer Council also includes whether improper activities were involved in the auction mechanism for the wholesale of live pigs.
I would also like to take this opportunity to point out that immediately after unusual fluctuation was observed in the auction price of live pigs on January 15, the Food and Health Bureau (FHB) contacted the Ministry of Commerce (MoC) for a meeting to identify ways to improve the flow of market information and work out measures to secure a stable supply. The MoC responded swiftly and made arrangements for a meeting the following day. At the meeting held in the morning of January 17, consensus was reached between both sides on new measures to be adopted. We made an announcement in the afternoon the same day on the new measures which came into immediate effect. The MoC and the relevant Mainland authorities also instantly requested the three agents for supplying live pigs to Hong Kong to fully cooperate to enable the new measures to be implemented smoothly.
The new measures include suitable arrangements to be made by the MoC to maintain a sufficient and stable supply of pigs to Hong Kong at a level that can meet the needs of the general public. To enhance market transparency, the MoC would on a daily basis notify the Government of the Special Administrative Region of the quantity of live pigs to be supplied to Hong Kong the following day and we will then make this known to the public accordingly. This will enable the market players, including the buyers and retailers, to have a clear picture about the supply of live pigs, which in turn will help stabilise the wholesale price of live pigs. Starting from today, the Agriculture, Fisheries and Conservation Department will upload onto its website information provided by various major importers or wholesalers about the supply and reference wholesale prices of a variety of fresh food produce (including that of the live pigs) so as to provide useful data to both the trade and the public. All these measures will help ensure a stable supply of live pigs and enhance the transparency of the operation of the live pig market.
As to how the live pig agents sell their live pigs, this is a matter of business decisions. As long as the agents sell their pigs in an open and transparent manner, the Government has no intention to interfere. I must reiterate that the primary concern of the Government is to ensure a stable supply of live pigs to Hong Kong and proper operation of the live pig market. The price of pork should be determined by the market.
(c) All live cattle consumed locally are imported from the Mainland. The number of live cattle imported into Hong Kong from the Mainland was around 41 000 in 2007. On average, it means some 110 cattle were imported each day, amounting to 19% of the beef consumption in Hong Kong. It is understood that the supply of live cattle from the Mainland is generally adequate with occasional unstable supply owing to two main reasons, one of which is the lower selling price of live cattle in Hong Kong resulting in a lack of incentive among the Mainland farms to export cattle to Hong Kong. This problem can be addressed through a suitable adjustment in price. The second reason is that most of the live cattle imported into Hong Kong come from northern provinces such as Shandong and Inner Mongolia and livestock transportation can be affected by adverse weather conditions or transportation problems, resulting in a delay in the supply of live cattle to Hong Kong.
The live cattle supply to Hong Kong was suspended on January 17 this year. We learnt from relevant Mainland authorities and the live cattle supply agent that the suspension was due to continuous heavy snowfall and bad weather in many parts of the Mainland which crippled the transportation of livestock. Subsequently, the daily supply of live cattle has resumed to an average level of over 80 cattle recently.
To maintain a stable supply, the FHB will continue to monitor closely the supply of live cattle to Hong Kong from the Mainland, and maintain close liaison with the relevant government departments in the Mainland and the agent. Where necessary, the live cattle agent will be requested to take effective measures to minimise the occurrence of unstable supply due to transportation problem or the price gap between the Mainland and Hong Kong as far as possible.
Ends/Wednesday, January 30, 2008
Issued at HKT 14:56
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