SHANGHAI, May 27 -- China's top economic planning agency on Tuesday pledged to crackdown on the hoarding of farm products and to curb rising food prices amid worries about higher inflation.
"Price stability is critical to overall economic development," the National Development and Reform Commission (NDRC) said in a statement on its website.
Regulators have been ordered to curb any sort of price manipulation, with the threat of criminal punishment in serious cases. They may also temporarily intervene to stabilize prices when necessary, the NDRC said.
It was the third time in two weeks that the NDRC, a Cabinet-level agency, has addressed the importance of checking rising prices. China's inflation rate, or consumer price index, jumped 2.8 percent in April mainly driven by food prices, with corresponding rises of 14.9 percent for vegetables and 16.4 percent for fruit.
The NDRC pledged that China will be able to meet its 3 percent inflation target for 2010. Food prices are expected to drop as the warm weather is likely to lead to good harvests for farmers, while cold weather and illegal speculation were the main reasons behind earlier food price rises, it said.
Investors and companies were worried the recent rise in the inflation rate might prompt the government to raise interest rates or take other steps that might slow down China's economic recovery.
The NDRC last week forecast that China's inflation rate in May and June would rise to 3 percent.
"Under the gloomy stock and real estate market, investors are targeting long-stored farm products like garlic as well-performing assets," Zhou Wangjun, deputy director of the department of prices under the NDRC, told Economic Information Daily on Tuesday.
The rising prices of farm products are partly due to the drought in Southwest China, low temperatures in other farming regions and price manipulation, Zhou said.
In Henan province, the price of garlic can reach 9,000 yuan ($1,320) per ton, Xinhua News Agency reported on Tuesday.
Data from the National Bureau of Statistics show vegetable prices increased 18.5 percent in March and 24.9 percent in April compared to the same periods last year, warning price supervision departments to shore up price controls.
However, in early May the prices of 15 major vegetables in 36 cities across the country decreased gradually and the price department predicts that prices will drop further as supplies increase over the summer season.
On May 9, the average wholesale prices of 25 vegetables in Beijing decreased 21 percent from the previous week and prices are dropping dramatically in other cities like Shenyang, Lanzhou, Chongqing, Wuhan and Nanjing.
On May 19, the 24 vegetables in the county's major wholesale markets of farm products decreased nearly 18 percent compared with that of the end of April.
Zhou said the NDRC will set up an improved system for supervising prices to keep tabs on any price fluctuations.