September 19, 2011

China's inflation decreases amid decline in egg, pork prices

Although China's Consumer Price Index (CPI) in August was 6.2%, it has reflected signs of decreasing due to declining egg and pork prices after Mid-Autumn, according to some analysts.

The fall in egg and pork prices indicate the start of easing inflation. The analysts also added that inflation has begun to fade, they argue, or lacks momentum to rise right now.

According to a survey in one agricultural food wholesale market in Beijing, the average egg price as of September 13 has fallen to RMB9.56/kg (US$1.50), down 5.53% compared with RMB10.12/kg (US$1.59) on September 8. The average pork price has fallen from RMB24.70/kg (US$3.87) of September 11 to RMB23.10/kg (US$3.62) on September 13.

Asian Development Bank (ADB) in a recent report said that China's inflation was expected to ease due to the autumn grain harvest and pork supply increasing and the fading effect of last year's inflation.

It is about one month before autumn harvesting. This year is expected to be a bountiful year barring severe disasters and other damage to the crops.

Besides going all out to prepare for the approaching autumn harvest, the State Council has issued a document to reduce the high cost of logistics to provide a better environment for agricultural commodity transportation.