CHINA'S top planning body yesterday warned local governments to be alert to recent rising consumer prices - and follow official guidelines.

Companies and industrial associations should not collude to raise prices amid a widespread growth in the cost of food, it said.

The governments of areas where consumer prices have exceeded local inflation-control targets "by a large margin" are banned from raising prices except to promote energy-saving projects, the National Development and Reform Commission said in an online statement.

The commission said governments shouldn't manipulate prices. If accidents or natural disasters cause price spikes, they should report to provincial governments about further adjustments and announce it to the public.

Companies and organizations are not allowed to raise prices through any price-alliance or price-fixing deals.

Those that seek a price monopoly, cheat, reserve goods for profit or intentionally drive up costs will face strict punishment, the commission said.

Local governments were also advised to offer subsidies to low-income people if surging prices have affected their normal lives.

The statement came after some food manufacturers recently raised prices on daily consumer necessities like instant noodles, dairy products and bean curds to cover more expensive raw materials.

China's consumer price index grew 4.4 percent in June and 3.2 percent in the first half from a year earlier, driven by the surging cost of food.

The growth has exceeded the country's annual target of three percent. Food makes up about a third of the index.

Two Chinese milk makers, Beijing-based Sanyuan Co and Shanghai Bright Dairy Co, will raise prices of their home-delivered products from tomorrow in Beijing due to soaring food and employee costs.

Prices of nine of Sanyuan's home-delivered products will cost consumers between 1.50 yuan (20 US cents) and 4.50 yuan extra per month.

Bright Dairy yesterday told Shanghai Daily that it had already raised prices of home-delivered products in Shanghai in May.

About 10 major Chinese instant noodle makers on Thursday began to add up to 20 percent on the price of their low-end products, which account for 60 percent of the total market.

Rocketing food costs have already prompted restaurants and fast-food chains like KFC to increase the prices of some products.