Distributors jack up green bean price

 An audio recording released Saturday on China Central TV revealed the reason behind soaring bean prices - concerted manipulation.
    The file that the National Development and Reform Commission (NDRC) released to CCTV recorded a distributor meeting organized by the Jilin Corn Center Exchange, a commodity spot trading center.
    "Price of the green bean this year is gonna soar," "we'll be able to see the future market trends for green bean prices," the representatives said at the meeting.
    Participating in that meeting were the 109 most influential distributors from 16 provinces and autonomous regions.
    The organizer also distributed a research report claiming that the production in 2009 dropped by about 64.05 percent year-on-year, much higher than the official number of 14.9 percent.
    After that meeting, the distributors started stockpiling. The NDRC named two Jilin-based distributors that doubled the prices in April over last October. As of Sunday, green bean prices ranged between 10.5 to 18 yuan ($1.55 to $2.66) per kilogram.
    "Jilin Corn Center Exchange misled the market and distributors conspired to raise prices in concert, violating the price law and administrative regulation of punishment on the price violations," according to the NDRC's statement.
    On July 1, the NDRC fined the Jilin Corn Center 1 million yuan ($147,710), took 500,000 yuan ($73,855) from its sponsors, and warned the distributors.
    The NDRC had its hand forced, said Zhang Yuanhong, researcher with Institute of Rural Development under the Chinese Academy of Social Sciences. The price hike was unprecedented and came right when the government was trying to rein in inflation, he said.
    Inflation has been the major concern of policymakers following the huge lending spree that started last year.
    Lack of investment channels with the tightening property sector and dismal equities market drove money to speculate on agricultural products. Green beans, garlic, corn, cotton and even some herbal medicines all saw abnormal price increases earlier this year.
    Unlike key commodities like pork and vegetables, the price speculation of small-output ag-ricultural products like green beans is almost inevitable, and the government couldn't possibly set up reserve system for each of them, Zhang said.
    To avoid the price manipulation, transparent information such as early disclosure of production, more efficient tracking and faster action, will be necessary, he said.