China’s consumer inflation slightly up in September

Residents shop at a supermarket in Nantong, Jiangsu province, China, September 27, 2022. /CFP

Residents shop at a supermarket in Nantong, Jiangsu province, China, September 27, 2022. /CFP

Consumer prices in China rose slightly faster in September amid rising food prices due to record heatwaves, seasonal pork price increases and a spike in demand for holiday groceries.

During the month, the consumer price index (CPI), an important measure of inflation, rose 2.8 percent from a year ago, the National Bureau of Statistics (NBS) said Friday.

The latest consumer inflation data is in line with Reuters’ forecast and is up 0.3 percentage points from the previous month. On a monthly basis, the CPI rose 0.3 percent, after falling 0.1 percent in August.

A screenshot from CGTN's Global Business show

A screenshot from CGTN’s Global Business show

A screenshot from CGTN’s Global Business show

According to the NBS, food prices rose 8.8 percent year over year, compared with a 6.1 percent increase in August.

Pork prices rose 36 percent, up 13.6 percentage points from the previous month.

“Pork prices continued to rise due to the seasonal recovery in pork demand and farmers’ reluctance to sell at lower prices,” said Dong Lijuan, senior statistician for the NBS.

“Measures such as releasing pork from national reserves slowed pork price growth in mid to late September,” Dong said, adding that the monthly pork price increase was 5.4 percent.

On September 13, China’s chief economic planner, the National Development and Reform Commission, announced that additional pork from central reserves would be brought onto the market to “ensure pork supplies and keep prices stable”, and promised that later another batch of pork would be released. this year if necessary.

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Prices of fresh fruits and vegetables rose 12.1 and 17.8 percent year-on-year, respectively, according to NBS data.

Dong said the increase in vegetable prices was due to high temperatures and less rainfall. The fruit’s price hike was driven by rising consumer demand during holidays, she said.

The traditional Chinese Mid-Autumn Festival, a three-day national holiday also known as the Moon Festival, fell on September 10 this year, slightly earlier than in previous years. In addition, the seven-day national holiday, which lasted from October 1 to October 7, marked the peak of the consumption season in the country.

Factory inflation remains a slowing trend

On a monthly basis, China’s producer price index (PPI) fell 0.1 percent in September, according to the NBS. After a remarkable 1.1 percent contraction in August, the slowdown in factory inflation in the country continued into September.

The ongoing slowdown in producer inflation was due to the price volatility of crude oil and other bulk commodities, Dong said. However, she said the slowdown trend has slowed as demand in some domestic industries has recovered.

Year-over-year, the PPI rose 0.9 percent, down 1.4 percentage points from August.

“The sharp divergence between PPI inflation in China and the Eurozone (43.3 percent yoy in August) suggests that China could gain a competitive advantage in manufacturing that could support Chinese exports,” said Lu Ting, Nomura’s chief economist China, in a statement. sent a note to CGTN.

However, he warned that “the worsening global slowdown is denting foreign demand”.

Of the major sectors, prices in the oil and gas extraction industry fell 3.8 percent from August, extending the downward trend of 7.3 percent. However, year-on-year, prices in the sector were still up 31.1 percent, but were 3.9 percentage points lower than in August, NBS data shows.

Oil prices were volatile during the conflict between Russia and Ukraine. Earlier this month, OPEC+, the main oil producer group made up of OPEC and allies, including Russia, agreed to sharp cuts in oil production in a bid to curb supply.

Manufacturing activity in China is showing signs of recovery as the manufacturing purchasing managers’ index reached 50.1 in September, up from 49.4 in August.

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