LCQ3: Supply and prices of essential livelihood commodities amid epidemic
11.5.2022

Following is a question by the Hon Stanley Ng and a reply by the Secretary for Commerce and Economic Development, Mr Edward Yau, in the Legislative Council today (May 11): Question: It is learned that since the outbreak of the fifth wave of the coronavirus disease 2019 epidemic, the supply of many essential livelihood commodities has been affected. This, coupled with rumours from time to time alleging that the Government will enforce restrictions on people's movement or other measures, has resulted in many members of the public affected by the rumours in a panic, and snapping up and stockpiling food, medicines and daily necessities, leading to a surge in prices for certain essential livelihood commodities. Some merchants have even taken advantage of this situation to inflate prices. In this connection, will the Government inform this Council: (1) of the measures that the Government has put in place, since the emergence of an acute shortage of face masks in the first wave of the epidemic, to ensure that the supply and prices of anti-epidemic supplies, medicines, fresh food and non-staple food are stable, and the measures in place to tackle the emergence of panic buying in the fifth wave of the epidemic, and whether it has assessed the effectiveness of such measures; (2) as it has been reported that some merchants have made use of epidemic-related news to inflate prices of essential livelihood commodities in a major bid to "reap profit from disasters", of the measures that the Government has put in place to deter the relevant situation; whether it will ask the relevant policy bureaux and institutions such as the Consumer Council to step up the monitoring of commodity prices, and disseminate correct information on the supply and prices of essential livelihood commodities through the Information Services Department; and (3) whether it will consider, by following the practices of other regions, setting up regulatory authorities (for instance, the State Administration for Market Regulation set up in the Mainland) and enacting legislation (for instance, the anti-price gouging statutes implemented in certain states of the United States) to implement price control during times of emergency situation to ensure price stability of essential livelihood commodities, and specifying more essential goods such as food and anti-epidemic supplies as reserved commodities under the Reserved Commodities Ordinance; if so, of the implementation details; if not, the reasons for that? Reply: President, The coronavirus disease 2019 epidemic has continued for over two years. With the full support from the Central Government and the efforts by the Hong Kong Special Administrative Region (HKSAR) Government, the HKSAR has been ensuring sufficient and stable supply of food and various major supplies. Having consulted the Food and Health Bureau, the Transport and Housing Bureau (THB) and the Financial Services and the Treasury Bureau, our consolidated reply to the various parts of the question is as follows: (1) At the onset of the epidemic in early 2020, there was an acute shortage of anti-epidemic supplies, in particular masks, around the world. The Government's target at that time was to seek supply through multiple channels by every means. In this regard, the Government Logistics Department procured masks and other anti-epidemic items worldwide through different channels and means, so as to meet the public needs. In the face of the shortage of supply around the world and in the local market at that time, as a policy breakthrough, the Government established the Local Mask Production Subsidy Scheme in March 2020 to provide subsidy to facilitate the establishment of local mask production facilities and the building up of stock. The 20 subsidised production lines collectively delivered about 470 million masks to the Government. The Government also provided technical support through the Hong Kong Productivity Council to another 35 production lines to increase local production. We are pleased to note the gradual increase in supply since then. Nowadays, the supply, price and quality of masks have greatly improved. This is precisely the employment of exceptional means to tackle problems in exceptional circumstances. Since the outbreak of the epidemic, government departments have monitored specifically and closely the food supply situation in the market, and liaised with the trade to ensure a stable supply. The Mainland is the major source of fresh food supply for Hong Kong, with fresh food and processed food from Guangdong Province accounting for the majority of the supply. The HKSAR Government has been communicating with the Government of the Guangdong Province to maintain an adequate and stable supply of food to Hong Kong. After the outbreak of the fifth wave of the epidemic early this year, various government departments joined efforts in this respect. For example, the Task Force of Supplies from the Mainland led by the THB has been working closely with the Mainland Government to explore various means to restore the stability of goods supply from the Mainland to Hong Kong. These include the launch of water and rail transport within a short period of time in response to the tight capacity of road transport owing to goods vehicle drivers being infected at that time, with a view to complementing the supply through road, water and railway transport. Regarding fresh food, the two Governments opened new channels for imports via water transport, and extended the opening hours of the Man Kam To Control Point to further facilitate fresh food trucks to cross the boundary, so that the supply of fresh food from the Mainland could be quickly restored and the prices could return to the normal level. The fifth wave of the epidemic has seen a surging demand for medical supplies, and the Central Government has provided support in this regard. To cater for the needs of various government departments and units, the Task Force of Ensuring Medical Supplies led by the Commerce and Economic Development Bureau (CEDB) has worked closely with its Mainland counterparts to ensure that the large quantities of medical supplies procured with the co-ordination of the Central Government are delivered to Hong Kong in an orderly manner. There are more than 30 types of supplies, such as rapid antigen test (RAT) kits, anti-epidemic proprietary Chinese medicines, paracetamol, high-grade protective masks and personal protective equipment, etc. The Government has also, through multiple channels, distributed these medical supplies to various target groups including the confirmed patients, frontline personnel, persons in jobs with higher infection risks, the underprivileged groups as well as members of the public. Among them, anti-epidemic kits were distributed to the confirmed patients and their family members living in the same household. More than three million anti-epidemic service bags containing medical supplies were also distributed to the households across Hong Kong in early April. Furthermore, with the support and assistance of the Central Government, the production capacity for relevant medical supplies from the Mainland (such as anti-epidemic proprietary Chinese medicines and RAT kits) and their supply to Hong Kong have significantly increased, resulting in an adequate supply in the market. The retail prices have also remained stable. (2) The provision of timely and accurate information helps ease public concern. Since February 15 this year, the Government ,including the THB and the CEDB, has regularly released information regarding the supply of fresh food, goods and medical supplies to ensure the latest information is accessible to the public. Besides, the Consumer Council has been monitoring closely the supply and price of various daily necessities and anti-epidemic supplies, as well as the sales practices of traders. In view of the fifth wave of the epidemic, apart from urging traders to ensure a stable supply of goods as far as possible and refrain from raising prices, the Council has also appealed to consumers to remain level-headed and rational when shopping. The Council has worked with the CEDB to launch the Approved RAT Kits Search Tool to facilitate members of the public to search for RAT kits on the approved lists of a number of places. (3) Hong Kong is a highly open free port. Unless otherwise prescribed by law with sufficient policy justifications, all commodities can be freely imported and exported, responding effectively and promptly to market demands. As a staple food in Hong Kong, rice is designated as a reserved commodity under the subsidiary legislation of the Reserved Commodities Ordinance (Cap. 296). We have been ensuring a stable supply of rice and keeping a sufficient reserve stock in case of emergencies or any temporary shortage of supply. All bureaux and relevant departments will continue to review and monitor closely the supply and demand of various essential supplies and market changes with a view to devising appropriate measures to stabilise supply in the market. In fact, based on the past experience, including that of the fifth wave of the epidemic, the adequate supply and stable prices of goods could be effectively secured by ensuring sufficient and stable supply in the market, reducing barriers and obstacles in the supply chain, effective dissemination of information, close cooperation with the Mainland Government and communication with the trade. Therefore, the Government currently has no plan to implement price control during times of emergency situation or include certain types of supplies on the list of reserved commodities.