January 25, 2008

Pork propels China's consumer price index to 4.8 percent in 2007

China reported that last year's inflation rate rose 4.8 percent, the highest level in more than a decade, with pork prices acting as the top propelling force.

The National Bureau of Statistics (NBS) on Thursday announced the yearly figure of CPI (consumer price index) which is the main gauge of inflation.

Food prices surged 12.3 percent last year, driving up the CPI figure by 4.0 percentage points, according to Xie Fuzhan, director of the NBS.

The average price of poultry and related products rose 31.7 percent in 2007 and the egg price increased 21.8 percent, Xie said.

Xie pointed that the escalating pork prices has pushed the CPI figure above 4 percent since last June.

Pork prices was said to be underestimated in 2006 which led to declines in pigs, especially sows. Pork markets further slumped at the wake of a massive culling of pigs due to blue-ear disease outbreak, Xie said.

The statistics board also cited high international prices for primary commodities to have affected domestic prices and contributed to the record-high CPI figure since 1997.

The oil prices broke over US$100 a barrel at the dawn of 2008, up from about US$25 a barrel in 2003. The edible oil prices nearly doubled last year in the international markets, Xie stated.

China is not the only country struggling with inflation woes as India reported a CPI rise of 5.2 percent, Russia 9.4 percent, US at 2.8 percent and EU at an average of 2 percent.