The government may also crack down on hoarding, offer food subsidies and hold local mayors responsible for ensuring vegetable supplies and controlling prices, the report said. In May, the government said hoarders will be fined by up to five times the value of the commodities held, the paper said.
The National Development and Reform Commission, the state economic planner, didn’t immediately respond to faxed questions sent by Bloomberg News.
Corn prices in China jumped to a record today as tightening supplies increased their investment appeal. Rice also reached an all-time high. China has already sold sugar, cotton, corn, aluminum and zinc from stockpiles in an effort to ease supply shortages and curb inflation, which gained at the fastest pace in two years last month.
“Prices of food and cotton have gone up to the point that the government has decided to step up efforts to crack down on speculation and make sure that inflation doesn’t flare up further,” Dong Shuzhi, manager at Beida Founder Commodities Co., said by phone from Shanghai today.
Consumer prices in China gained 4.4 percent in October. The government’s full-year inflation target is 3 percent. China’s central bank raised bank reserve requirements last week and last month increased interest rates for the first time in three years to tame inflation.
Record Prices
Vegetable prices in the first 10 days of this month jumped by 62.4 percent from a year earlier, the Financial News said today, citing a survey of prices by the Ministry of Commerce. Prices have also jumped 11.3 percent from the beginning of this year, it said.
Corn for September delivery gained to a record 2,419 yuan a metric ($364) ton before dropping as much as 1.3 percent to 2,378 yuan a ton on the Dalian Commodity Exchange. Rice on the Zhengzhou Commodity Exchange fell as much as 1.7 percent after reaching 2,558 yuan, the highest ever.
The Ministry of Commerce said today it will work with other government agencies to curb inflation. The supply of most goods is sufficient although a few products, including diesel, are in short supply, the ministry said in a statement ahead of a news conference in Beijing. The government is selling pork and sugar from reserves to ensure supply, the ministry said.
The Dalian Commodity Exchange said yesterday that it will curb “abnormal” trading to prevent the price manipulation and other activities that disrupt an orderly market.
The exchange may void any trade, including instances in which the buyer and seller are the same entity; if they are between related accounts; or if they are frequently placed and canceled, the statement said.
Dalian became the third bourse following the Zhengzhou Commodity Exchange and Shanghai Futures Exchange to announce steps to curb speculation in commodities since Oct. 26.
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