India rice ban leads to HK cost worries

A catering veteran in Hong Kong expects the prices of rice from Thailand and Vietnam to increase by about 30 percent after India announced a ban on the export of white rice in an attempt to curb domestic price hikes.

New Delhi imposed the ban on non-basmati white rice on July 20 to enhance domestic supply and curb inflation. This came as retail prices of the rice climbed 3 percent in just one month after late and heavy monsoon rains damaged crops.

The president of the Federation of Restaurants and Related Trades, Simon Wong Ka-wo, a registered rice merchant, said yesterday stocks in Hong Kong are enough for less than two months and expects prices will go up by 30 percent, or even 50 percent, by October at the earliest.

He expects the ban to last for a long time and affect supply to the world as India contributes 40 percent of global rice supply.

The government should explain the situation to ease public concerns and prevent panic buying, he said, urging supermarkets not to increase prices.

An importer and a supervisor of the Rice Merchants' Association of Hong Kong, Kenneth Lee Fung-nin, said the ban will affect the catering sector, with some importers already increasing prices by 5 to 10 percent.

However, that does not mean people have to pay more for daily meals. Locals prefer jasmine rice so a ban on white rice would not seriously affect the SAR, he said.

"Jasmine rice from Thailand that Hongkongers eat is harvested once a year and the next harvest will be in November or December. The supply has been fixed so I don't think there will be a significant increase or drop in its price," Lee said.

Simon Wong Kit-Lung, chairman of the Institution of Dining Art, said Hong Kong imports only a small amount of Indian rice so the ban would not directly affect the SAR. However, the ban might cause a rise in rice prices in other countries exporting rice to Hong Kong, he said.

But restaurants said they might charge more for dishes containing rice if there was a significant surge in prices.

Jonathan Leung Chun of the Association of Restaurant Managers said India's ban had affected prices around the world, and exporters in Thailand and Vietnam were also planning to raise the price.

"I don't think some restaurants will buy a large amount of rice in advance to stock up, because rice is not the most expensive ingredient and storage cost is high," he said.

"I think people will understand that we have to charge more if prices double," said, Leung, who runs a dozen restaurants, adding that eateries may promote alternatives, such as noodles, if rice prices are too high.