China NDRC refutes reports on oil price

China's top economic planner on Thursday denied claims that it has allowed cooking oil manufacturers to raise their prices in recent months. The National Development and Reform Commission (NDRC) made the comment in response to media reports that claimed that China has allowed cooking oil companies to raise their prices in order to cover rising production costs. An official surnamed Zhou from the NDRC's pricing department said that the reports are groundless, as China has never imposed a ban on price increases and raising or lowering prices does not require the government's approval. Prices are set by the cooking oil producers themselves, he added. "China has been paying great attention to the cooking oil market and price adjustments and has taken various measures to ensure steady market supplies," he said, adding that market supplies and state reserves are adequate for the time being. Another NDRC official said the media reports have misunderstood the government's moves, explaining that the government previously sold soybeans to leading cooking oil manufacturers at lower prices in order to stabilize sales prices for their products. Zhou stressed that 95 percent of China's products and services are market-based. Chinese authorities have been wary about food prices in light of the country's recent inflation woes. Food prices account for nearly one-third of the basket of goods used to calculate the nation's consumer price index (CPI). June's inflation escalated to a three-year high of 6.4 percent year-on-year. Officials and analysts said prices of pork, a staple food in China, have been the main driver of inflation. The Ministry of Commerce said Tuesday that pork prices have spiraled downward over the last two weeks. However, economists doubt that the trend will continue. Cooking oil is an important commodity for Chinese families. Spot prices of soybean oil in the international market rose 57.6 percent from a year earlier in July, and retail prices of soybean oil in China grew 18.1 percent in July from a year earlier, Zhou said. Hong Tao, a professor at the Beijing Technology and Business University, said the possibility of price increases for cooking oil is slim, as the summer season often sees weak demand for the product. In addition, market supplies of cooking oil still exceed demand and state reserves are sufficient, he said. China is scheduled to release its inflation figures next week, with the market expecting them to remain at a high level. The People's Bank of China, or the country's central bank, has raised interest rates three times so far this year, in addition to raising its reserve requirement ratio for banks six times this year. NDRC spokesperson Li Pumin said Tuesday that maintaining stable prices is a priority for the government in the second half of this year.