April 19, 2012

China's farm produce prices up 10%

As supplies of most agricultural products are becoming more plentiful, China's farm produce prices are likely to fall back to 10% growth this year, a think tank forecast on Wednesday (Apr 18).

As the Chinese Academy of Social Sciences (CASS) released a new green paper on the issue, it predicted that grain prices are likely to grow 7% and livestock prices may jump 12% on year in 2012.

It is estimated that fishery products will see a 5% rise in price, according to the paper, which analyses the development of China's rural regions in 2011 and predicts their development in 2012.

China's food prices, which account for roughly a third of the weighting in calculating the consumer price index (CPI), the main gauge of inflation in China, surged 11.8% on year in 2011, pushing the index to grow 5.4%, well above the government's control target of 4%.

Prices of pork, China's favourite meat, saw great rises in the middle of last year, stirring public concerns of stubbornly high inflation in the country. However, the CPI has shown signs of easing in the first quarter of 2012. It rose 4.5% in January and narrowed to a 3.2% increase in February before rebounding to 3.6% in March. The government aims to keep the CPI increase at around 4% this year.