August 2, 2011

China has asked local governments to continue to increase their stockpiles of grains, oilseeds, sugar and meat even as inflation has likely peaked, local media reported Monday (Aug 1).

The Commerce Ministry is focused on controlling sharp short-term fluctuations in food prices and will intervene to calm or stabilise the market to manage inflationary expectations, said Vice Commerce Minister Jiang Zengwei.

The official's remarks followed a sharp rise in food prices that drove the consumer price index close to a three-year high in June, up 6.4% from a year earlier.

Many analysts said however that China's inflation has already peaked and July's inflation figure is likely to show some signs of moderating.

Pork prices have gradually stabilised and the lagging effects on inflation are weakening, analysts said, adding that nonfood prices are unlikely to drop and may show small increases in July