SPECULATION on food products like mung beans is unlikely to sharply push up China's Consumer Price Index, an important gauge for inflation, according to analysts.
The rising food prices earlier this year were mainly because of bad weather not speculation, said Yao Jingyuan, chief economist of the National Bureau of Statistics.
In light of the volatile stock market and strengthening regulation on the property market, many believe that speculative capital has flowed into food products like mung beans and small red bean since their prices have tripled from last year, Yao said.
Output of food grains other than wheat and rice produced in China dropped 30 percent from 2003 to 2.5 million tons in 2008, according to data from the National Development and Reform Commission.
Drought in northeast China, one of the main grain-producing area, aggravated the situation last year.
Mung bean was priced at 9 yuan (US$1.32) a kilogram last October, but soared to 20 yuan in May, according to the data.
Bad weather played a big role in the price rise, but such a sharp price jump in beans could have attracted speculation, said Zhao Jidong, a senior official with the Jiangsu branch of bureau.
The NDRC last Tuesday urged action against rising food prices amid high inflation fears.
The top Chinese economic planner last Thursday told local governments to step up efforts to strengthen market monitoring and clamp down on speculators who force up the prices of farm produce.
Profiteers' illicit earnings will be confiscated and they may face fines of up to 1 million yuan, NDRC said in a statement posted on its Website.
Regulators should make every effort to curb price manipulation, it said.
China's CPI jumped 2.8 percent in April, driven mainly by food price rises, up 14.9 percent for vegetables and up 16.4 percent for fruits.
The NDRC has projected that the second-quarter CPI will continue to rise, with CPI in May and June at around 3 percent. But it also said prices of vegetables and fruits should drop as temperatures rise with the start of summer.
"Since the central government's intense preventative measures on food product speculation, I don't think the CPI figure will sharply increase in respect to this," said Wang Li, a research fellow with the Institute of Quantitative & Technical Economics under the Chinese Academy of Social Sciences.