August 29, 2011

China's pork costs continue to soar

The July pork prices in China continued to increase, according to authorities on Friday (Aug 26), amid government efforts to curb its jumping prices that have been fuelling high inflation.

Surging pork prices have been the main driver of sky-high consumer prices in the country. Pork is the most widely consumed and affordable meat in China.

The Chinese Ministry of Commerce said that pork prices rose 11.7% on-month in July. It was a 56.7%-surge from a year earlier.

Officials at the ministry attributed the increase to the Mid-Autumn Festival, one of the major festivities of the Chinese calendar, which falls in mid-September this year.

Many merchants started to stock their goods as demand is expected to soar before the festival.

The government expected that pork prices will rise more than 50% in August. The prices rose 0.1% during the August 15-21 week from the previous week.

China's consumer prices surged 6.5% on-year to a 36-month high in July due to soaring food costs.

A Chinese senior official said inflationary pressure will likely remain high in the country.

"Global liquidity will remain abundant in the short term and imported inflationary pressure has not eased by much," said Zhang Ping, head of the National Development and Reform Commission.

Zhang said rising production costs, seasonal supply shortages of farm produce and the possibility of natural disasters are also factors pushing consumer prices high.