Country to strengthen monitoring of produce prices

The country will strengthen monitoring of agricultural product prices during the flood season and take measures including release of reserves and offering subsidies if bad weather and natural disasters occur, the National Development and Reform Commission (NDRC) said yesterday.

All price regulatory departments in the country will closely track the market supply and price changes of agricultural products, especially those of basic vegetables, in order to stabilize prices and prevent an inflation rebound, the NDRC said in a notice published on its website yesterday.

When bad weather and natural disasters occur, all local price regulatory departments must quickly start contingency plans and increase market supply through release of reserves and managing supply sources, the country's top economic planner said.

Subsidies could also be used to reduce the distribution costs for agricultural products and help farmers restore production when their facilities suffer damage during natural disasters, it said.

The NDRC urged local price regulators to crack down on price hikes, hoarding and fraud during severe weather and natural disasters.

The country's flood season usually runs from May to October with the central, eastern and southern regions prone to floods.

Liu Ying, a rice dealer in Shaoyang, Central China's Hunan Province, told the Global Times there tends to be two or three price hikes for agricultural products during the summer flood season each year.

"The rice prices usually increase about 10 percent each time but they will usually return to the normal level thanks to temporary subsidies from the government during bad weather," she said.

China's consumer price index (CPI), a major gauge of inflation, rose 3.0 percent from a year earlier in May, the lowest since July 2010 and below the market expectations for a 3.2 percent increase.

Meanwhile, data from the National Bureau of Statistics last week showed major food prices in the first half of June dropped 1.98 percent from the last 10 days of May.

Shenyin Wanguo Research & Consulting predicted that the CPI in June will be just 2.6 percent.

"The fact that the NDRC has recently stepped up project approvals and the central bank cut interest rates showed the government is confident of keeping inflation within this year's target of 4 percent," said Wang Yuwen, a researcher with Shanghai-based Bank of Communications.