Replies to LegCo questions
LCQ17: Pork price
Following is a question by the Hon Frederick Fung and a written reply by the
Secretary for Food and Health, Dr York Chow, in the Legislative Council today
(November 23):
Question:
It has been reported that the statistics of the Ministry of Commerce of the
Mainland revealed that the nationwide pork prices have been decreasing
continuously since October this year, and the decreasing rate accelerated in
late October, and as at October 30, the weekly average purchase price of live
pigs has dropped for the sixth consecutive week, down by 9% in aggregate. In
addition, Ng Fung Hong Limited (NFH) announced earlier a 23% downward adjustment
in the wholesale price of live pigs supplied to Hong Kong, but some local pork
retailers indicated that there is limited room for downward adjustment of the
current retail pork price, and rebutted that live pigs offered at a discount of
20% to 30% in price by NFH are of poorer pork quality. On the other hand, some
members of the trade also indicated that as the prices of live pigs have
gradually dropped, there is definitely room for downward adjustment of the
retail pork price, and the pork retailers were only using various excuses to not
agree to reduce the price. In this connection, will the Government inform this
Council:
(a) of the average monthly wholesale, import and retail prices of fresh and
chilled pork imported from the Mainland since January this year, as well as the
changes in such prices; of the difference in the retail prices of fresh and
chilled pork;
(b) whether there has been a corresponding downward adjustment of the retail
price of fresh pork imported from the Mainland as a result of the considerable
drop in the wholesale price for live pigs supplied to Hong Kong recently; if
not, whether the authorities have looked into the reasons for that, and have
proactively investigated why the drop in the wholesale price has not been
reflected in the local retail pork price, as well as whether there are members
of the trade profiteering through price-gouging; what measures the authorities
have in place to urge pork retailers to lower the pork price as soon as
possible, and to curb members of the trade profiteering through price-gouging,
so as to enable the public to buy pork at a reasonable price that reflects the
cost; and
(c) whether the authorities have looked into the aforesaid situation of poorer
quality of pork sold at a discounted price as mentioned by local pork retailers,
and have taken follow-up actions?
Reply:
President,
The policy objective of the Government is to maintain a stable supply of various
foodstuffs and to ensure food safety. Food price has always been determined by
the free market. It is the Government's responsibility to improve market
transparency and enhance market efficiency so as to help consumers make an
informed choice.
My reply to the various parts of the question is as follows:
(a) The wholesale price of live pigs (that is, the price of live pigs paid by
live pig buyers to live pig import agents) and the retail price of fresh pork
(i.e. fresh lean pork mentioned below) from January 2011 to the present are
shown in Annex 1. However, the wholesale price of live pigs is not equal 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 offals.
Auction price of live pigs is determined by auction.
As regards chilled pork, the Government does not compile statistics on the
wholesale price of chilled pork. We can hence only work out the import price of
chilled pork based on the information on the import quantities and value of
chilled pork declared for customs purposes. This is however not the wholesale
price. The import and retail prices of chilled pork from January 2011 to the
present are shown in Annex 2.
The difference in the retail prices of fresh and chilled pork is shown in Annex
3.
(b) As shown in the price information, the wholesale price of live pigs had been
on a rising trend since January 2011 but started to turn downward in October.
The change in the retail price of fresh lean pork generally follows that of the
wholesale price of live pigs, but at a lesser extent. Take the figures in July
as an example, the average wholesale price of live pigs was $16.8/catty, an
increase of 35.5% over that in January, while the average retail price of fresh
lean pork was $41.6/catty, marking an increase of 22.4% when compared with that
in January. In October, the average wholesale price of live pigs was
$15.4/catty, an increase of 24.2% over that in January, and the average retail
price of fresh lean pork was $42.1/catty, showing an increase of 23.8% when
compared with January.
As regards the prices of chilled pork, the latest statistics for September
showed that the average import price was $15.6/catty, representing an increase
of 36.8% when compared with that in January. The average retail price of chilled
lean pork for the same month was $36.5/catty, representing an increase of 38.8%
over that in January.
Since January 2011, the difference in the retail prices of fresh and chilled
pork has been narrowing from an average of $7.7/catty in January to an average
of $5.6/catty in October.
We have approached the trade (including live pig import agents, buyers and pork
retailers) to find out more about the composition of pork price. The trade
advised that in addition to the purchase price, other operational costs such as
transport cost, wages of workers and rental had to be considered in fixing the
price of pork. When the wholesale price of live pigs keeps rising, retailers may
not be able to pass on all of the increase to consumers. They will also take
other factors into consideration, such as the affordability of the public, etc.
Likewise, when the wholesale price of live pigs goes down, retailers will also
need to take into account other factors including the operational cost, and
therefore may not be able to make the same level of reduction at the same time.
Such commercial considerations are no different from those of other trades.
Live pigs for public consumption mainly come from the Mainland (the rest are
supplied by local farms). To maintain a stable supply, the Food and Health
Bureau has all along liaised closely with the relevant Mainland authorities and
live pig import agents. In July 2007, the Food and Health Bureau and the State
Ministry of Commerce agreed after discussion that market for supplying live pigs
to Hong Kong should be opened up for healthy competition. Subsequently, the
number of agents for supplying Mainland live pigs to Hong Kong increased from
one to three in October 2007.
To maintain a stable supply of food and provide consumers with more choices, the
Government also encourages the trade to explore different sources of food
supply. In August 2006, the trade started importing chilled pork from the
Mainland to offer the public an alternative. The consumption of chilled pork
increased from around 4,600 tonnes in 2006 to around 15,000 tonnes in 2010.
We have introduced measures to improve the flow of market information. Starting
from mid-January 2008, we have announced online on a daily basis the quantity
and auction price of live pigs arriving at the slaughterhouse on the day and the
estimated number of live pigs to arrive at the slaughterhouse on the following
day. In September 2011, the Food and Environmental Hygiene Department (FEHD)
further enhanced the relevant website by providing more detailed information for
the current month and the past 12 months. This enables the live pig buyers,
retailers and the public to have a clear picture about the supply of live pigs.
(c) All live pigs supplied to Hong Kong must be imported from the registered
farms approved by the State General Administration of Quality Supervision,
Inspection and Quarantine for supplying live pigs to Hong Kong. They are subject
to stringent monitoring by the Mainland animal quarantine authorities and have
to pass inspection before delivery to Hong Kong. The FEHD has been monitoring
the sources in the Mainland supplying live pigs to Hong Kong. There was no
substantial change regarding such sources before and after October this year.
The FEHD also performs ante-mortem and post-mortem inspections on all imported
live pigs, so as to ensure that they are wholesome and fit for human consumption
before delivery to markets.
Ends/Wednesday, November 23, 2011
Issued at HKT 17:56
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Annex