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Following is a question by the Hon Frederick Fung and a written reply by the Secretary for Food and Health, Dr Ko Wing-man, in the Legislative Council today (March 26):
Question:
According to the latest information released by the National Bureau of Statistics of China, the consumer price index in February this year rose by 2% year-on-year, which hit a record low in 13 months. While food prices rose by 2.7%, the price of pork dropped drastically by 8.7%. In this connection, will the Government inform this Council:
(1) of the changes in the average import prices and retail prices in last year of various types of food items (including meats, vegetables and canned food, etc.) imported from the Mainland, and whether the changes in such prices were in tandem with the trend of the commodity prices on the Mainland; and
(2) for each month of last year in respect of fresh and chilled pork imported from the Mainland, of (i) the average wholesale, import and retail prices, as well as the changes in such prices, (ii) the differences between the retail prices, and (iii) whether the changes in retail prices were in tandem with those of wholesale prices; if they were not, of the reasons for that?
Reply:
President,
It is the policy objective of the Government to maintain a stable supply of various foodstuffs and to ensure food safety. Food price has always been determined by the free market. The Government is responsible for enhancing market transparency and market efficiency to assist consumers in making appropriate choices.
My reply to the various parts of the question is as follows:
(1) Annex 1 sets out the average retail prices of local food items, import prices of related food items (if any) and the changes in such prices released by the Census and Statistics Department regularly.
Information on the trend of Mainland commodity prices is set out in Annex 2. The trend of import prices and retail prices of local food items is affected by various factors, including the purchase cost, other operational expenses such as transportation cost, wages of workers and rental, as well as the affordability of the public. As such, we cannot make a direct comparison between the trend of Mainland commodity prices and the changes in import prices and retail prices of similar local food items.
(2) The wholesale prices of live pigs imported from the Mainland (i.e. the prices of live pigs paid by live pig buyers to live pig import agents) and the retail prices of fresh pork (lean pork) between January and December 2013 are set out in the table in Annex 3. The wholesale price of live pigs is not equivalent to the wholesale price of fresh lean pork because the weight of a live pig includes not only the weight of pork, but also that of the head, bones, skin and offal. The auction price of live pigs is determined by competitive bidding. As a whole, the average wholesale price of live pigs between January and December 2013 fell by about 10%, while the average retail price of fresh lean pork over the same period dropped by about 7%.
As regards chilled pork, the Government relies mainly on information shown in the trade declarations about the quantity and value of chilled pork imported as the basis for deducing the import price. This is not equivalent to the wholesale price. The import and retail prices of chilled pork from January to December 2013 are set out in Annex 4. The quantity of chilled pork imported last year was rather volatile, averaging about 535 000 kg per month. The average import price tended to be higher when the import quantity was low. On the other hand, the price fell if and when the import quantity went up. The changes over time were also reflected in the import price of chilled pork from the Mainland. The average retail price of chilled lean pork over the same period ranged from around $33 to $34 per catty, representing an increase of about 2% to 4% for most of the time as compared with that of January 2013. It was about 4% higher in December 2013 as compared with that of January 2013.
Annex 5 shows the difference in the retail prices of fresh and chilled pork. It could be seen that the difference in prices remained relatively stable, with the price of a catty of chilled lean pork being generally about $3 to $8 lower than that of fresh lean pork.
We have previously sought advice from the trade (including live pig import agents, buyers and pork retailers) about the components underpinning the price of pork. According to them, in addition to the purchase cost, other operational expenses such as transportation cost, wages of workers and rental are relevant factors for determining the retail price of pork. When the wholesale price of live pigs or the import price of chilled pork rises, retailers may not necessarily be in the position to pass on the increase fully to the consumers since they would have to take into account other factors such as affordability. Likewise, when the wholesale price of live pigs or the import price of chilled pork goes down, retailers would have to consider other factors including the operational expenses, and therefore may not be in the position to reduce the retail price instantly. The same commercial considerations are applicable in other trades.
Ends/Wednesday, March 26, 2014
Issued at HKT 16:17
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