China's commodity prices not expected to rise in long term

There has not been a notable tendency of comprehensive changes in both the supply and demand of bulk commodities and hence commodity prices do not have a basis for a long term rise, China's National Development and Reform Commission (NDRC) said on Monday.

Meng Wei, the NDRC spokesperson, said during a news conference that the recent rise in commodity prices was mainly caused by a gradual global economic recovery, short-term adjustment between supply and demand, sufficient liquidity worldwide and market speculation. While the global economic recovery is not yet stable or balanced, there has not been a notable tendency of comprehensive changes in the supply and demand of commodities and their prices do not have the basis for an increase in the long run, she said.

Prices in general will stay in an appropriate range domestically, Meng said. She noted that food and services, both taking a relatively large proportion in determining the level of the consumer price index (CPI), are less impacted by global price changes. China has a sufficient food supply and pork prices are returning to normal level as production resumes. All these will help lay a good foundation in helping the CPI remain stable. Meanwhile, production capacity of industrial consumer goods remains sufficient with full market competition in place and their prices are also likely to remain stable. Year-on-year growth of the CPI for this year is expected to be moderate and stay within the annual price control targets.