GOVERNMENT RICE (Trading)

Mr Lim Choon Mong asked the Minister for Commerce and Industry if he will state -

(a) The cost of rice per ton as purchased by the Government;

(b) The selling price per ton from the stockpile;

(c) The total tonnage sold in April, May and June 1955, respectively;

(d) The average total gross profit per month; and

(e) The manner in which the above profit is expended.

Mr D. S. Marshall: (a) Government purchases rice by open tender. Prices, therefore, are determined by prevailing market prices at the time of the tender.

(b) Present selling prices ex Government stockpile are: - "B" grade rice $464 per ton of 2,240 lb. net ex godown. "C" grade rice $446 per ton of 2,240 lb. net ex godown.

(c) Sales ex stockpile, exclusive of sales to the Army, during the months stated were: - April 1955 ... 3,419 tons May 1955 ... 2,437 tons June 1955 ... 2,887 tons

(d) There is no average gross profit. Sale prices are adjusted to conform to the policy of selling on a "no profit, no loss" basis.

The financial results of trading since the inception of stockpiling have been as under: - $ c. December 1954 ... loss 60,098 05 January 1955 ... loss 13,278 43 February 1955 ... profit 44,134 97 March 1955 ... profit 23,248 37 April 1955 ... profit 17,553 91 May 1955 ... profit 50,075 65 June A/C's are not yet completed.

It will be seen from the above figures that the profits during the first six months amounted to $61,639.41 on a turnover of approximately $8,000,000. Since the offtake is unknown, in advance, selling price has to be based on estimated figures, so that it is impossible to avoid entirely small profits or losses. The selling price is adjusted to allow for these small profits or losses.

The following table shows the alterations in prices which have been made and which took into account the above trading results: - PRICE ADJUSTMENTS Original selling Price 15/2/55 12/5/55 7/7/55 $ $ $ $ A. Grade 542 per ton 526 511 (stock finished) B. Grade 494 per ton 494 479 464 C. Grade 490 per ton 476 461 446 I. Grade 314 per ton 307 (stock finished) (No stock)

(e) In view of the answer to the preceding part of this question, this does not arise, any temporary profit providing for further reduction in selling price below cost price to even the accounts by the end of the year.