China's first herbal medicine index was launched in Chengdu over the weekend by the Ministry of Commerce, and is designed to monitor market prices of herbal medicines and avoid sharp price fluctuations.

The index, composed of price index and purchase management index, shows the market prices, price changes and change rates of 1,275 medicinal plants like the candlestick chart of the stock market.

The index was released Saturday for the first time and will be released on Ministry of Commerce's online platform (http://cif.mofcom.gov.cn/cif/html/) every week.

"High volatility of Chinese herbal medicine prices is mainly attributed to the weak monitoring of transaction information, so the producers and sellers cannot get timely and accurate information of market supply and demand," said Zhu Xiaoliang, deputy director of the ministry's market operations department.

Prices of some medicinal plants have fluctuated greatly in the last two years. The market supervision and information release index will be an important means to effectively monitor prices and regulate the nation's herbal medicine market, he said.

Zhang Jinquan, deputy director of Chengdu bureau of commerce, said, "The index will guide herbal planting upstream and affect the traditional Chinese medicine producers downstream. The index can tell growers which medicinal herb prices are expected to rise."

The next step is to enhance its authority, coverage and influence on the industry and make it as popular as the Shanghai and Shenzhen stock indexes for stock investors, said Zhang.

"The release of Chengdu Index will strengthen the influence of Chengdu's herbal medicine prices and promote the nation's traditional herbal medicine industry," Zhai Zhihong, head of Commerce Statistical Society of China, told the Global Times Sunday.

Sichuan Province has China's largest reserve of medicinal plants, about 70 percent in Chengdu. Chengdu's Hehuachi Herbal Medicine Market is one of the nation's biggest markets by turnover.