China prices rise as cost of food spikes

Bad weather hit farmers in China, pushing up the price of their produce and contributing to rising inflation. (Photo: AFP pic)

BEIJING: A spike in the price of fruit and vegetables pushed up China’s inflation rate in September, official figures showed Tuesday.

For the fourth straight month, the consumer price index (CPI) — an important barometer of retail inflation — rose, hitting its highest level since February, at 2.5%, the National Bureau of Statistics said.

Extreme typhoon weather lashed southern China last month, bringing strong winds and heavy rain, and badly affecting agricultural production, it added.

The world’s biggest pork producer is also scrambling to contain an outbreak of African swine fever that has spread through pig farms, with pork prices rising significantly from August.

Adding to the strain on consumers, the cost of diesel and gas jumped more than 20% on last year.

Oil is priced in US dollars, a currency that has risen against the yuan in recent months, making fuel imports pricier.

The producer price index — which is used to measure the performance of the industrial sector — decelerated to a 3.6% on-year rise in September.

That was down from 4.1% in August but above the 3.5% forecast in a Bloomberg News survey.

While prices rose, the costs of raw materials went down, the NBS said.

“Policymakers are likely to look through the latest pick-up in consumer price inflation and focus instead on evidence of cooling economic momentum, including slower core inflation and weaker factory gate price pressures,” said Julian Evans-Pritchard, senior China economist at Capital Economics.

The rise in consumer inflation is “unlikely to prevent (the central bank) from loosening monetary policy further in the coming months in a bid to shore up economic growth,” he said in a note.