China: State intervention to curb feed prices

18-01-2008 | |

The Chinese government has started to temporarily intervene in the market to control the prices of some daily staples such as grain and meat to counteract inflation.

The National Development and Reform Commission (NDRC) announced that the prices of grain products, edible oil, pork, beef, mutton, milk, eggs and liquefied petroleum gas are being monitored and any rises have to be approved by the government beginning Tuesday next week.

The consumer price index (CPI) had risen 6.9% last November, which represents the highest level in a decade causing much concern.

Under the new regulations, major producers need to obtain government approval before raising their prices; and major wholesalers are required to file a statement at government agencies if they raise prices by 6% within 10 days or by 10 % within a month.

Climb in pork prices
“Once prices level out, these measures will be lifted,” according to the NDRC who stated further that retail prices of pork had climbed 43% already in the first half of this month.

“Surging food prices have put a strain on low-income residents,” said Wang Tao, economist with Bank of America in Beijing, who added that the government is trying to prevent huge price increases.

In addition, there are rumours of some companies hoarding goods and raising prices arbitrarily to encourage panic buying by consumers.

Chinese authorities had announced earlier that will continue to release stockpiled pork in the retail market before the Lunar New Year holiday which begins on February 6.

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