Shanghai is planning to set up a food price warning mechanism to reinforce food demand and supply management, say sources from the Shanghai Economic Commission (SEC).

If everything works out as planned, the mechanism will be the first of its kind in Shanghai, and possibly in the whole country, according to Xia Bojin, chief of the SEC Food Management Office.

Xia said the planned warning mechanism will take two to three years to complete.

The mechanism is to be built upon the existing online system shian.gov.cn, which has been monitoring food prices for three years, he said.

The trade prices and volumes of some 300 staple and non-staple foods have been released and are updated on the website on a regular basis.

Once the mechanism is added, the prices of monitored food are to be collected and analyzed on a daily basis, according to Zhu Wenqun, a member of research staff at the Food Management Office.

If prices rise and fall compared with previous and successive days, or exceed a prescribed limit, red or yellow warnings will be triggered depending on the seriousness of the problem, Zhu said.

The government will take measures to handle price fluctuations.

The warnings will serve as a basis for the government to research and analyze the local market, he said.

"As there is no previous experience to emulate, the setting of warning limits is being handled with great caution," Zhu said.

Xia stressed it would take a relatively a long time for the planned warning mechanism to be completed, while the current system is mainly for monitoring.

"By monitoring prices of essential foods, we aim to aid decision-making in food supply and demand management for both government and businesses." He said.

There are seven categories of food for monitoring, namely vegetables, meat, grain, eggs, edible oil, fish and beans.

The city's 13 wholesale markets, five large and medium supermarket chains and 15 open markets are now being monitored.

Daily trade prices and volumes of targeted food are forwarded by the markets to the office's information centre, where the assembled data are computerized and published. The website has received 50,000 hits a day, with most visitors food traders in Shanghai and its vicinity, Xia said.

Apart from price monitoring, the system can also help monitor the safety of food, he said.

Shanghai has never had a standardized commercial warning mechanism, said Yuan Lijun, head of bis.net.cn, a leading Shanghai online business information platform.

Bis.net.cn is to supply technical support and help with data collection for the project, Yuan said.

(China Daily January 7, 2005)