September 21, 2011

China's pork prices, a key driver of inflation, edged up 0.1% in the week ended September 18 from the previous week, hitting a record high, data published by the Ministry of Commerce showed on Tuesday (Sep 20).

The increase marked the sixth consecutive weekly rise in pork prices, but the pace slowed from 0.7% in the week ending September 11 and 0.4% in the week ending September 4.

The price of pork, a staple food product, is particularly sensitive in China since it has a big impact on the public's inflation expectations.

Pork prices surged 45.5% in August from a year earlier, contributing 1.27 percentage points to annual inflation of 6.2% last month.

Spikes in pork prices have been a main factor driving China's headline inflation, although the meat only accounts for 3% of China's consumer price index basket.

Combating inflation remains Beijing's top policy priority despite worries about a slowdown in the world's second-largest economy threatened by the worsening European debt crisis and a possible recession in the US.

Average retail prices for 18 kinds of vegetables last week rose 3.7% from the previous week.