Families are set to pay more for imported Thai rice because of falling demand and a strong baht. The warning came as a Thai delegation, led by commerce minister Porntiva Nakasai, met local rice merchants to discuss the slide in Thai rice imports.

Thai jasmine rice, famous for its soft texture and fragrance, previously accounted for more than 90 percent of the SAR's market share.

However, this plunged to about 82 percent last year and 70 percent this year due to the strong Thai baht and weak Hong Kong dollar, according to Chareon Laothamatas, vice president of the Thai Rice Exporters Association.

"Even though the actual price of rice did not rise, the exchange rate made rice more expensive from about US$1,000 (HK$7,800)per tonne to US$1,120," Laothamatas said.

Trade and Industry Department figures show the total quantity of Thai rice imports dropped from 257,900 tonnes (81.3 percent) to 198,600 tonnes from January to November this year, accounting for 66.8 percent of all rice imports.

Kenneth Chan Kin-nin, chairman of the Rice Merchants' Association of Hong Kong, said the price rose 10 percent from last year, and the industry had to turn to cheaper rice from Vietnam and China.

"Importers are having a difficult time since we cannot pass on all costs to the consumers," Chan said.

He expects a further rise in the retail price of Thai rice.
Government figures also show Vietnam rice becoming more popular with imports leaping from 16,000 tonnes last year to 54,500 tonnes from January to November 2010, a sharp rise in its market share from 5 percent to 18.3 percent.

"More restaurants bought Vietnam rice to fight against inflation, though many consumers still prefer Thai rice," Laothamatas said.

Lee Kwong-lam, vice president of the Hong Kong Food Trades Association who has a retail and wholesale business, said the retail price of high quality Thai rice rose 10 percent to HK$11 to HK$12 per kilogram, and HK$10 to HK$11 for average quality Thai rice, while Vietnam rice costs HK$7 to HK$8 and Chinese rice HK$8 to HK$9.

"When the import price of Thai rice rises, imports of rice from other countries will rise to reflect the market situation," Lee said.

Thomas Woo Chu, executive managing director and general manager of Hsin Kuang Restaurant and president of the Hong Kong Catering Industry Association, said despite the price rise, consumers still prefer Thai rice.

"They are used to the taste and the quality," Woo said.

Source: The Standard Newspaper (HK)