China's CPI jumps 3.8% in October on food prices
China’s consumer price index, a main gauge of inflation, rose 3.8 percent year on year in October, the National Bureau of Statistics said on Saturday.
The growth rate, which was up from 3 percent in September, the most since January 2012.
Food prices grew 15.5 percent year on year last month, up from 11.2 percent in September, while non-food prices gained 0.9 percent, 0.1 percentage points lower than in September.
Pork prices rose 101.3 percent year on year, contributing 2.43 percentage points to the 3.8-percent CPI growth, and spilled over to the prices of beef, mutton and chicken, all of which registered double-digit year-on-year growth in October, said NBS senior statistician Shen Yun.
Affected by African swine fever and cyclical factors, pork prices rose visibly during the past few months, representing the main driver of CPI expansion.
Jump in pork imports
China has rolled out multiple measures to stabilize hog production and pork supply. On November 6, the State Council urged efforts in an executive meeting to restore hog production by ensuring the supply of swine feed, increasing the production of poultry, beef and mutton, and utilizing food reserves.
Official data showed that pork imported into the country reached about 1.33 million tons during the first three quarters, up 43.6 percent year on year.
As government stepped up efforts to release pork reserves, expand pork imports and encourage hog breeding, the supply and demand of pork will become balanced, said Tang Jianwei, chief researcher of the Bank of Communications.
In October, prices of vegetables and fruits fell 10.2 percent and 0.3 percent year on year, respectively. Meanwhile, transportation and communications prices slipped 3.5 percent, dragging the CPI down by 0.42 percentage points.
Excluding food and energy, the core inflation level remained unchanged from September at 1.5 percent, Shen noted.
“The core inflation level was stable during the past 10 months, which indicates a relative balance between the aggregate supply and demand in the macroeconomic system,” said Guo Liyan, a researcher with the Chinese Academy of Macroeconomic Research, adding that the current CPI uptick was controllable.
The CPI in urban and rural areas posted a year-on-year growth of 3.5 percent and 4.6 percent, respectively.
Consumer prices in the first 10 months rose an average of 2.6 percent from a year earlier, the bureau said.
Saturday’s data also showed that China’s producer price index, which measures costs for goods at the factory gate, dropped 1.6 percent year on year in October, marking the steepest decline since July 2016.
The factory deflation was punctuated by falling raw material prices, including in the oil and gas extraction and ferrous metal smelting industries. It aligns with other indicators showing shrinking manufacturing activity in October, with the official Purchasing Managers’ Index indicating contraction for a sixth straight month.