Customers buy pork at a food market in Shanghai, China. The price of pork, a staple food in China, rose 20.2% in July 2022 from a year ago, official data shows.
Qilai Shen | Bloomberg | beautiful pictures
BEIJING – China’s consumer price index hit a two-year high in July as pork prices recovered, according to official data released on Wednesday.
The price of pork, a staple food in China, rose 20.2% in July from a year ago. It marks the first increase since September 2020, according to official data accessed through Wind Information.
In fact, pork prices posted their biggest monthly gain – up 25.6%, the data showed.
Farmers hesitate to sell – in the hope of higher prices in the future Bian Shuyang, agricultural products analyst at Nanhua Futures, said that contributed to the rise in pork prices in July, said in a statement.
Going forward, Bian expects pork prices to hardly surpass July levels.
Two Chinese holidays in September and October will help support consumer demand for pork, Bian said.
According to the analyst, hog producers are currently operating profitably, a sign of more supply.
Pork prices have risen sharply in the past three years because pig farmers had to fight a deadly disease and many new producers.
Fresh fruit and vegetable prices also spiked in July, up 16.9% and 12.9% respectively from a year ago, according to the National Bureau of Statistics.
Old food prices plummeted
While food prices rose, Wednesday’s inflation data continued to reflect lackluster demand in the Chinese economy.
The consumer price index rose 2.7% in July, missing expectations for a 2.9% increase, according to analysts polled by Reuters.
The outbreak of Covid-19 in many cities and the lack of further stimulus may have led to weaker growth in July.
Zhiwei Zhang
Chief Economist, Precision Asset Management
“Non-food prices actually fell in July [by 0.1%] Zhiwei Zhang, president and chief economist, Pinpoint Asset Management, said in a note from June levels, reflecting weak demand.
“The outbreak of Covid-19 in many cities and the lack of further stimulus could lead to weaker growth in July,” he said.
Despite the summer break, the tourist price component increased only 0.5% in July from a year ago.
Violent outbreaks of the past few weeks have disrupted holidays with flights canceled and venues closed. in tourist spots different, from Hai Nam Island to the Tibetan Plateau.
China’s CPI last month remained the highest since July 2020, when the index also rose 2.7%, according to Wind data.
China’s inflation data is much lower than that of the US, which is expected to release its consumer price index data overnight. Economists polled by Dow Jones expect the US consumer price index to up 8.7% in July from a year ago, down from 9.1% in June.
Wednesday’s data showed China’s producer prices continued to moderate, also below expectations.
The 4.2% year-on-year increase reported in July missed the Reuters poll forecast of 4.8% growth.
“The falling PPI inflation also points to limited potential for CPI inflation” in China, said Nomura chief economist Ting Lu.
– CNBC’s Patti Domm contributed to this report.
