Rising food prices continue to push up China's consumer
inflation gauge, but according to economists, the increases will be
short-lived.
China's consumer price index (CPI) grew by 2.7 percent in
February over the same month last year, 0.5 of a percentage point
higher than the previous month, the National Bureau of Statistics
said yesterday.
"A rise in food prices has been pushing up CPI figures since
November and will likely keep the headline numbers at 2 to 3
percent in the coming months," said Qu Hongbin, chief economist at
HSBC China.
Official statistics show that food prices were up by 6 percent
over the same month last year.
"Rises in food prices should be temporary given China's massive
stockpile of grain after three good harvests," said Qu.
The growth in grain prices slowed slightly from 6.9 percent in
January to 6.8 percent in February, while price rises of meat and
eggs picked up from 13.5 percent and 21.4 percent to 15.4 percent
and 30 percent respectively.
"This implied that price gains of grain products were no longer
the main contributor to headline CPI," said Qu.
Song Guoqing, an economist at Peking University, agreed that
grain prices are unlikely to rise further. But Song said the
current grain price is just approaching its long-term average
level, which has been declining slowly.
(China Daily March 14, 2007)