NDRC to ensure commodity price indexes’ accuracy

China’s top economic planner introduced new rules on Thursday to ensure that price indexes of major commodities and services more accurately reflect actual market conditions, in a move to curb speculation in the volatile market.

Under the new rules, national price indexes carrying the name of “China” and “nation” must fully indicate the coverage of its data collection, the National Development and Reform Commission ( NDRC), the top economic planner, said on Thursday.

The move is aimed at standardizing market prices for important goods and services, including bulk commodities, to ensure reasonable pricing mechanism and accurate data collection, the NDRC said.

Also, to ensure the accuracy of the original price data, the measure imposes requirements on the location where the data is collected. The new rules will take effect on August 1. More effective regulation of data collection, compilation and release means that indexes can effectively reflect actual consumption and output, and restrain speculation, industry experts noted.

“The improved price compilation system is expected to adjust and amend some indexes that are not scientific and distort market views, so that participants can better grasp actual market demand while conducting futures and spot operations,” Wang Guoqing, research director at the Beijing Lange Steel Information Research Center, told the Global Times on Thursday.

The standardizing of the index compilation process is part of the government’s efforts to manage volatility in market prices, and is expected to have a great impact on curbing speculation, Wu Chenhui, an independent industry analyst, told the Global Times on Thursday.

The new rules came as surges in some bulk commodity prices over the past month that may not necessarily reflect the fundamentals of supply and demand, analysts noted.