CUSTOMS officers yesterday revealed they had netted Hong Kong's biggest cocaine haul in a raid which uncovered eight kilograms of the drug as well as pistols and grenades. The cocaine, with a street value of $13 million, was found in a cabinet in a Sha Tin flat during an operation involving more than 50 officers. Friday night's bust is the latest in a series of successful operations executed by Customs and Excise. But the increasing amount of cocaine heading for Hong Kong underlines a huge demand for the drug. The haul, believed to have originated from South America, was discovered in the week Customs and Excise Commissioner Clive Oxley retired. At a farewell press briefing yesterday, Mr Oxley warned South American drug barons were expanding into Hong Kong and the rest of the region. ''It is worrying . . . we do not get hauls of this size in Hong Kong very often,'' he said. ''Indications are this is going to be a trend. The South American pushers are always looking for more markets and the best market is always where people have money to pay.'' He said pushers were preying on the Asia Pacific area, and added Customs and Excise would continue to be extra vigilant in the battle against the growth of cocaine smuggling. The successful operation resulted in the arrest of a Peruvian Chinese. The 25-year-old man was tagged leaving his apartment in Chui Tin Street, Sha Tin, where he caught a taxi to the junction of Mei Tin Road and Chik Wan Road. When he got out of the taxi, officers from the Customs Drug Investigation Bureau pounced. A packet containing 35 grams of cocaine was found in the suspect's pocket after a body search. The man was escorted back to his flat where 8 kg of cocaine - with an 80 per cent purity - was found, together with three grenades, two loaded semi-automatic pistols and nine magazines containing 66 rounds of ammunition. Ballistic officers, the Bomb Disposal Squad and the Organised Crime and Triad Bureau rushed to the scene after being told of the haul. A search of a second flat in Tsim Sha Tsui resulted in a further seizure of 3 g of cocaine. In Hong Kong the price of cocaine is high, up to $2,000 a gram, and is aimed at the territory's affluent residents and the entertainment industry. In recent years the amount of cocaine seized in Hong Kong has grown to alarming proportions. In 1989, 0.9 kg was detected; the figure for 1990 was 0.4 kg; 1991 saw 7.5 kg of the drug uncovered; the amount found in 1992 dropped to 0.92 kg - but this year's total so far, including Friday's haul, stands at 15.7 kg. ''This was a record seizure but the most worrying thought is this cocaine was intended for the local market in Hong Kong,'' said Lawrence Wong, head of the Customs Drug Investigation Bureau. ''There is an increasing demand from the user and that is also a huge worry.'' Mr Wong said he was not sure whether the weapons were intended for use in guarding the cocaine or for use in future crimes. The arrested man, who is visiting Hong Kong, has been charged with trafficking an illegal drug and possession of arms without a licence, and will appear before Sha Tin magistrates tomorrow. Mr Wong said further arrests were likely in connection with the seizure. Meanwhile, Mr Oxley said he was worried about the general influx of drugs into the territory. He said that since China opened up in the early 1980s, drugs had started to flow through the mainland as one of the routes from the notorious Golden Triangle heroin-producing area bordering Burma, Laos and Thailand. ''I know the Chinese authorities are doing what they can but they have a very difficult border to patrol and there is some evidence more heroin is finding its way to the Pearl River than ever before,'' he said. ''However, the authorities have made some splendid seizures. They are doing what they can to prevent drugs crossing our border.'' The Customs Drug Investigation Bureau will join drug enforcement agencies in the United States to trace the source of the record-breaking haul, which is believed to have been flown into the territory.