China Flags New Rules for Commodity Price Indexes
USAgNet - 06/21/2021
China will issue new rules on the management of price indexes for commodities and services, it said on Thursday as the government steps up scrutiny of the country's commodity markets and battles to contain inflation.
According to Reuters, the measures becomes effective from Aug. 1 and will standardise how price indexes are compiled and improve transparency on the release of information, the National Development and Reform Commission (NDRC) said on its official WeChat account.
Last week, the NDRC said it would tighten its monitoring of commodity prices and strengthen market supervision. Producer inflation in the country hit its highest in more than 12 years, driven largely by surging commodity costs, data for May showed.
China's fast-growing commodity markets are served by many, mostly private index providers that sell price data on major raw materials, including grains, metals and oil products, to traders and analysts.
In some cases, the pricing data is used to settle physical trades of commodities or underpins a derivative. Shanghai-based Mysteel's rebar index underpins Singapore Exchange's China rebar contract, launched on May 31.
Mysteel had no official comment.
Other providers include Shandong Zhuochuang Consulting Co Ltd, which produces a fuel index based on data from 70 cities and is used by the NDRC for its price monitoring. It had no immediate comment when contacted by Reuters outside normal office hours, Reuters reported.
Under the new rules, price index providers will need to be independent of direct stakeholders in the commodity and service markets covered by the index. Information about the providers and the methods used to develop and formulate the indexes will also need to be fully disclosed.
The commission said authorities will have the right to review compliance and take disciplinary measures for non-compliance.
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