BEIJING – China’s consumer prices rebounded last month, official data showed today, as food prices picked up due to weather difficulties and rising demand ahead of the Lunar New Year festival.
In December, the consumer price index rose more than expected at 0.2% on-year, said the National Bureau of Statistics (NBS), with prices increasing for fresh produce and meats such as pork, beef and mutton ahead of next month’s nationwide holiday.
“Due to continued low temperatures, the production, storage and transportation costs of fresh vegetables and fruit increased,” said NBS senior statistician Dong Lijuan.
The index is a key gauge of retail inflation, and the rebound follows the first negative reading in over a decade last month as food costs fell.
Today, Dong said consumer demand is picking up due to New Year’s Day and the upcoming Lunar New Year, bumping up the prices of other food items.
However, pork prices, which rocketed previously after an African swine fever outbreak ravaged pig stocks, continued to drop 1.3% on-year last month as supplies of the staple meat recovered.
For the whole of 2020, consumer prices rose 2.5% on-year.
“The pork price cycle continues to weigh on the inflation outlook,” said Zhaopeng Xing, senior China strategist at ANZ Research, in a recent report, saying there has been a faster-than-expected recovery of hog stocks.
Meanwhile, the producer price index (PPI), which measures the cost of goods at the factory gate, fell 0.4% on-year last month –better than November’s 1.5% drop.
“Domestic demand recovered steadily, coupled with the continued rise in prices of some international commodities,” said Dong.
For the whole of 2020, PPI fell 1.8% on-year. – AFP, January 11, 2021
