China’s top securities regulator urges closer monitoring of agricultural futures amid overheating concerns

China’s securities regulator has called for tighter oversight of agricultural commodity trading amid concerns that speculation could be driving an unusual surge in prices for staples ranging from garlic and ginger to iron ore and coal.

Fang Xinghai, the deputy head of China Securities Regulatory Commission (CSRC), on Saturday said the market should be monitored and market participants made aware of the rising risks.

Fang delivered the warning during the Risk Management and Agriculture Development Forum in Kunming, held during the weekend.

Fang said that the three major futures exchanges in Zhengzhou, Dalian and Shanghai should pay close attention to unusual trading and price changes as well as large capital flows.

The authority will guide the exchanges to improve rules on trading margins, position limits as well as transaction fees for intraday trading, in order to prevent excessive speculation, Fang said.

Fang’s comments follows recent dramatic gains in some commodity futures contracts.

Among one notable example, the wholesale and retail prices for garlic are up 90 per cent and 67.9 per cent in October compared to levels a year earlier, according National Development and Reform Commission data.