China's top economic planner on Thursday determined that the China branch of the International Ramen Manufacturers Association (IRMA) has illegally fixed prices for instant noodles.

The IRMA branch had held three meetings of instant noodle manufacturers and related businesses early this year to discuss specific plans to raise prices, said the National Development and Reform Commission (NDRC).

This constituted collusion and manipulation of the market in violation of the Price Law.

The branch had published a meeting memo and caused panic buying in some cities, which seriously disrupted market order, said the NDRC.

The NDRC has ordered the branch to make a public explanation and invalidate the illegal pricing agreement.

The NDRC is continuing its investigation into the branch.

Ramen prices of major manufacturers, who hold 95 percent of the market, jumped 20 percent on average and some rose up to 40 percent in July.

The lowest priced instant noodles cost only one yuan per packet before the price change.

The price hike has triggered widespread debate among producers, consumers, experts and netizens.

Enter "instant noodles" and "price hike" in Baidu, the largest Chinese search engine, and more than 1.5 million web pages show up.

Luo Jiang, an graduate student with the prestigious Tsinghua University, said, "It is not really about money. I am angry because consumers do not have a say on the price. Why can't we have a public hearing?"

Calling the move "self-redeeming", Meng Hesu, a senior official with the branch, said earlier that the price hikes were reasonable as raw material prices had risen 20 percent since last year.

For example, the price of palm oil, which accounted for 18 percent the total cost, more than doubled from 4,000 yuan per ton in 2006 to 8,200 per ton this year, Meng said.

"If we don't lift the prices, there will be no profit," Meng said, adding the profit margin of ramen manufacturers was only two to four percent.

"Instant noodles are daily necessities so price-lifting has to be cautious and should not be determined," said Hu Shoujun, a sociology professor at Fudan University.

In July, China's foodstuffs were priced 15.4 percent higher than the same period last year, and the growth rate was 7.8 percentage points higher than the first half.

July saw edible oil prices up 30.1 percent, and prices of meat, poultry and related products up 45.2 percent and egg prices rose 30.6 percent.

July was the fifth consecutive month the CPI rose by more than three percent, the government-set alarm level for the current year. The index for the first seven months rose by 3.5 percent. (one U.S. dollar is equal to 7.80 yuan)