ZCZC
BCN-03
CHINA-ECONOMY-INFLATION
China inflation slows with food prices in August
BEIJING, Sept 9, 2020 (BSS/AFP) – Chinese inflation moderated in August, data
showed Wednesday, as a slowdown in the surging price of pork tempered food
costs.
The consumer price index (CPI) hit 2.4 percent, in line with forecasts and
below the previous month’s reading, as pork saw its slowest increase in a
year, while analysts said the easing could also be attributed to a high base
comparison.
Dong Lijuan at the National Bureau of Statistics, which released the
figures, said pork supplies had improved but noted that the cost of other
meats also rose, “affected by factors such as rising feed costs, recovery in
demand, and rising pork prices”.
The price of pork, a staple in China, has been soaring for more than a
year after the country’s pig herds were ravaged last year by African swine
fever, which forced the culling of at least a million animals.
The meat’s price rose 52.6 percent on-year in August, a slowdown from the
85.7 percent surge in July and more than 100 percent earlier in 2020.
“The falling CPI inflation was mainly driven by a sharp slump in pork
prices on-year, thanks to a high base and rising weight of pork in the CPI
basket,” Nomura’s Lu Ting said.
A national campaign to curb mounting food waste in August sparked
speculation that the country’s food supply outlook is worse than the
government admits — exacerbated by swine fever, the coronavirus outbreak and
this year’s heavy flooding which destroyed huge swathes of farmland.
Customs data published earlier this week showed that Chinese meat imports
had increased more than 70 percent this year.
The NBS said industrial production continued to improve and prices of
commodities such as oil, iron ore and non-ferrous metals grew — allowing for
improvements in the producer price index (PPI).
The PPI, which measures the cost of goods at the factory gate, fell 2.0
percent in August, largely in line with forecasts.
Factory gate prices had previously been dragged by fallout from the
coronavirus pandemic, but started rising again in June — with analysts
noting a recovery in industrial demand.
BSS/AFP/MSY/0958 hrs