inflation (PPI, CPI) and pork prices in August
A piglet stands in a pen on a pig farm in Tianjin, China, February 2, 2018.
Giulia Marchi | Bloomberg | Getty Images
Pig prices in China rose 46.7% year-on-year in August as the country faced increasing meat shortages amid a swine fever outbreak that has killed millions of pigs.
This was a far greater increase than July's pork prices, which rose 27% from a year ago.
The increase in pork prices contributed to a 1[ads1]0% increase in food prices overall in August, according to data released by China's National Bureau of Statistics on Tuesday.
As much as half of China's pig population was estimated to have died from the prolonged swine fever outbreak, discovered more than a year ago. China's pig herd could be halved by the end of this year, according to a July forecast by analysts at Dutch bank Rabobank.
Prices of other meat in China also rose in August, which contributed to the jump in food prices. Prices for beef, mutton and chicken were up – between 11.6% and 12.5%.
Fresh fruit prices continued to rise in August, jumping 24% year on year, but saw a slight increase from July around 39%. [19659002] Overall, the Producer Price Index (PPI), a key barometer for corporate profitability, fell 0.8% from the previous year in August – the worst contraction from year to year since August 2016.
The Consumer Price Index (CPI) in August rose 2, 8% the year before, unchanged from July. This compares with an increase of 2.6% as predicted by analysts.
Consumer prices in the country will go even higher, according to a note from the research firm Capital Economics on Tuesday.
"Consumer price growth should increase in the coming months as pig stocks continue to decline and the decline from lower oil prices eases," economists Julian Evans-Pritchard and Martin Rasmussen wrote in the note.
"But the coming cuts (reserve requirements) announced last Friday are in line with our view that the rampant inflation in food prices is not a barrier to money relief, and we continue to expect that we will loosen in over the next quarters. "
how much money the banks must have in reserve, as the country tries to stimulate the economy further.
