The appreciation of the renminbi will not cause big price hikes of imported daily necessities, foods and home appliances items from the mainland, Hong Kong importers and retailers said yesterday.

The 2.1 per cent yuan appreciation would have a minimal effect and it would take a certain time to see any price increases.

However, there is pressure to raise prices of imported canned food and other basic necessities coming from mainland producers and manufacturers, especially those paid in renminbi, said Lee Kwong-lam of Hong Kong and Kowloon Provisions, Wine and Spirit Dealers Association.

"So far our mainland producers have not informed us that they will raise prices but we will keep closely monitoring the fluctuation of renminbi's exchange rate in the market," he told China Daily.

"If the renminbi remains strong we would increase retail prices immediately," he said. "Whether we will raise retail prices or not is fully subject to the interaction between market demand and supply."

"But consumers need not fuss about it, as the rise would be very small, probably less than 2 per cent. I believe consumers can accept it.

Lee expected that prices on rice products, fruits, and vegetables will remain unaffected. "At present, about 30 per cent of rice products sold in Hong Kong are imported from the mainland with the rest from Thailand," said Lee, adding that the price would not increase in the near future.

Gome Electrical Appliances Holdings, a leading retailer of white goods from the mainland, said yesterday that it has no plan to increase retail prices of mainland-manufactured home appliances sold in the SAR at this moment.

"Theoretically, the retail prices of these goods should increase as renminbi appreciated. But no (mainland) manufacturers have told us they would raise their prices," said Lam Yau-fung, head of Gome's corporate finance and development division.

Further soothing consumers' worries, he said the retail prices of mainland-manufactured products would drop as the costs decrease for importing production raw materials from overseas.

Lam believed the yuan revaluation would not undermine the competitiveness of mainland products that compete with Japanese and US products, as mainland goods are no long competing solely on prices.

"The quality of mainland-manufactured products has improved and prices still stay quite attractive. Many electronics, audio and visual products of domestic brands, such as TCL, have become the first choices of Hongkongers."

Diane Chiu, group marketing manager of Wellcome Supermarket, told China Daily she believed it would take some time to see price increases on mainland goods.

"Whether we increase retail prices or not depends on suppliers. So far they have not requested any price hike," she said.

Retailers, too, would be cautious in raising prices, she said, adding that none of them would take the risk of losing consumers amid cutthroat competition among Hong Kong supermarkets.

"We will not pass the cost on to consumers if our suppliers' price hike requests are acceptable," Chiu said.

In the tourism sector, local travel agencies believed that mainland-based airlines and hotels would increase prices slightly.

But that would not impede Hongkongers' interest in touring the mainland.

Chuck Fong of Kwan Kin Travel Services said yesterday: "I don't think that Hong Kong travellers will spend less or cancel their mainland tours, just because the Hong Kong dollar becomes a little bit 'cheaper' than before."

(HK Edition 07/23/2005 page3)