Premier Wen Jiabao and a top Hong Kong government official urged citizens not to panic about the supply of rice as both the mainland and the SAR have sufficient stock.

However, local supermarkets, rice importers and Thailand rice exporters expected the supply to be unstable and the price to go up in the near future.

People buying rice at a local supermarket yesterday. The price of rice has gone up recently, sparking fears that there could be a shortage in near future. Edmond Tang

Wen made the comment yesterday to Hong Kong journalists during his visit to Laos amid a feared drop in rice supply, which resulted in an increase in cereal price.

Import price of rice from Thailand, which accounts for 90 percent of local consumption, has increased from US$420 per tonne in December to US$750 now. Rice production across Southeast Asia has dropped because of weather changes.

Malaysia and the Philippines have announced plans to import rice from other countries.

Wen told Hong Kong journalists that the mainland has between 40 and 50 millions tonnes of rice held in reserve, which will ensure sufficient supply of rice to the two SARs.

Local citizens were flocking to supermarkets for rice yesterday. A housewife living in Aberdeen surnamed Yu went to Wan Chai for the staple food.

"I only want to buy a pack of rice, otherwise my family will have no rice tonight," she said.

A retired man surnamed Shum said he hoped the central government will increase grain supply to the city.

But Secretary for Commerce and Economic Development Frederick Ma told the public not to worry as the law stipulated that the reserve stock of rice should be maintained at a level sufficient for consumption for 15 days. Hong Kong has 14,400 tonnes of rice reserve currently.

But the fears still exist. Hong Kong and Kowloon Vermicelli and Noodle Manufacturing Industry Merchants' General Association honorary president Lee Kwong-lam expected the rice price to increase in the future and supply to remain unstable.

Thai Rice Exports Association president Chookiat Ophaswongse said Thailand has been exporting more than one million tonnes of rice each month since last October, which is between 20 and 30 percent higher than the normal volume, after Vietnam and India have attempted to curb exports. This resulted in speculators holding up the food item.

"There are even people not involved in the industry stocking up on rice in their backyard," Ophaswongse said in a phone interview.

He said Thailand, which originally expected to export 8.75 million tonnes of rice a year, is also facing inflation and domestic supply problems.

All local supermarket chains said rice supply was stable.

But a spokesman for PARKnSHOP said the supermarket would monitor the situation closely, and added it was under pressure to increase retail prices.

China Resources Enterprise deputy managing director Francis Kwong said retail prices of rice and eggs already increased last year.

"The profit margins for rice and eggs are small. If the suppliers increase the price, we will pass it on to the customers," he said.

Government statistics released last month showed that rice price has recorded a 23.4 percent year-on-year increase, while an increase of 21.6 percent in food cost were recorded.

(HK Edition 04/01/2008 page1)