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Denise Tsang

Mainland suspension triggers concern from bakers, producers
Supplies of bakery products and noodles are under threat in Hong Kong after the mainland temporarily suspended flour exports under a new trading regime.
Bakers and flour-product producers yesterday voiced serious concern over supplies  after mainland customs officials froze flour exports on Tuesday until details of new quotas  became available.
The new regime restricts the amount of flour to be sold to Hong Kong and other markets and levies export tariffs on wheat flour, corn flour and rice flour. It threatens to disrupt supplies  to Hong Kong, which sources 75 per cent of its flour from the mainland.
A spokesman for Hong Kong's Commerce and Economic Development Bureau said yesterday the bureau had reflected its concern over the uncertainty of flour supplies to the mainland's Ministry of Commerce and would continue monitoring  developments.
Industry sources said the move was likely to trigger  price increases for consumer favourites such as egg tarts, pineapple buns and noodles as bakers sought to pass on higher raw material costs to customers.
They said major flour suppliers such as Lam Soon Hong Kong Group and Hong Kong's dominant bakery supplier Garden  had stockpiles  but the likelihood of a flour shortage was intensifying in view of  the indefinite suspension in exports.
'There is a big question mark on when exports will be resumed,' one source said. 'Major bakery chains with production across the border are relatively luckier because they can bring in finished products.
'However, smaller bakeries and noodlemakers relying on imported flour will be hit hard.'
Federation of Hong Kong Industries director general Dennis Yau Tat-wang  said they  had relayed the industry's concern to the Hong Kong and central governments, and Beijing was working on the situation.
'My understanding is that Chinese customs are still sorting out details of the quota system,' Mr Yau said. 'Until then, no flour exports are allowed.'
The Census and Statistics Department said that in the first 10 months of last year imports of wheat, or meslin flour,  totalled 156,286 tonnes,  worth HK$466 million. Of this, 60 per cent, worth HK$250 million, came from the mainland.
Japan provided  28 per cent of wheat flour imports worth HK$141 million.
Hong Kong Food Council member Lee Kwong-lam,  who also runs the flour wholesale business Tung Tai Hong,  said supplies were tight even though the price had surged by 30 per cent.
He said the new price for flour was between HK$70 and HK$120 a catty, depending on quality. 'We have no idea when flour can be exported again, maybe not until the Chinese customs come back from holidays and sort out the details on export tariffs,' he said.
Mr Lee said they would have to sell flour imported from Japan, Canada and Australia when mainland stocks ran out. 'The price of food is mostly affected by inflation,' he said. 'But we are selling according to the price we imported at.'
In a move to stabilise supplies and prices of flour and edible oil, the mainland  brought in the new rule restricting exports, with the country's inflation hitting an 11-year peak of 6.9 per cent in November.
Tight supplies of flour in Hong Kong have led many smaller bakeries to raise prices in recent months.



Flour export ban threatens HK supplies