August 7, 2023
BEIJING – Rice trade and catering industry insiders in Hong Kong have warned about the possible ramifications of India’s latest ban on its rice exports, and suggested that Hong Kong increase the amount of rice it imports to cope with possibly steep price hikes.
India — the world’s largest rice exporter — halted the export of non-basmati white rice on July 20, saying the move was to ensure its own domestic supply would be adequate, and to rein in the country’s own soaring rice prices caused by crop failures following monsoons.
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In 2022, the South Asian country shipped out about 22 million metric tons of rice, or about 40 percent of the global rice trade.
India exported about 10 million metric tons of non-basmati white rice in 2022, accounting for 45.4 percent of the country’s rice exports that year. Media reports have said the export prohibition of such a large quantity of rice has triggered fears of inflation in global food markets.
Following the ban, Thailand and Vietnam, the world’s second and third-largest rice exporters respectively, have raised their rice prices and are renegotiating prices on sales contracts for about 500,000 tons for August shipments, according to media reports.
Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, told local media that India’s export ban will have little impact on Hong Kong, as the city’s demand for Indian rice is very small.
In 2022, Thailand supplied approximately 58.2 percent of Hong Kong’s imported rice. About 24 percent was imported from Vietnam, with 8.1 percent from the Chinese mainland, 3.8 percent from Cambodia, and 5.9 percent from other regions, according to the Trade and Industry Department.
However, Wong cautioned about the possible price increase from other exporters, which he said may lead to a 30 to 50 percent price hike in Hong Kong.
Wong said that although Hong Kong’s rice market is dominated by products from Southeast Asian countries, high-quality rice from the mainland is also becoming popular in the city.
He said that only certain rice traders in Hong Kong are eligible to import mainland-grown rice, and he urged the special administrative region government to allow more merchants to import mainland rice.
If mainland rice could achieve 30 percent of the market share in Hong Kong, foreign rice exporters would not be able to significantly affect prices, Wong continued.
Yeung Wai-sing, who chairs the Association for Hong Kong Catering Services Management, told China Daily that rising prices for Southeast Asian rice imports, if they were to occur, would not have a significant impact on the Hong Kong market in the short term.
Rice is a reserved commodity under Hong Kong laws, Yeung said, adding that local merchants always have a sufficient stockpile of rice that would last for a few weeks.
Yeung also said some high-end rice from the mainland, such as the “pearl rice” imported from Northeast China, has entered local market, giving customers more choices.
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Local-restaurant owner Kate Lee expressed her concern about the potential price increase of Thai and Vietnamese rice in the Hong Kong market. She explained that many restaurants in Hong Kong have rice noodles on their menus, and the price hike would pressure restaurant owners.
She added that many restaurants have yet to use rice from the mainland, but she said she believes that local residents would like to try different rice varieties.
Hong Kong resident Beivm Lai said her household has never purchased Indian rice before. She also believes that importing more rice from the mainland would add to product diversity in the local market.