Central government agencies have pledged to closely monitor any
potential inflation following recent reports about food price
increases.
At an international conference held in Beijing on Monday, Zhou
Xiaochuan, governor of the People's Bank of China (PBOC), said even
though the country’s consumer price index (CPI) remained low and
within an acceptable band there was potential that inflation may
"raise its head" at any moment.
Zhou said the PBOC "has to remain concerned" about the CPI.
Fluctuation on the global market could also affect domestic prices,
he added.
His remarks coincide with the release of a report by the
Rome-based Food and Agriculture Organization (FAO) of the United
Nations which identifies that the surge in the world's cereal
prices this year had reached "levels not seen for a decade."
According to figures from the National Bureau of Statistics
(NBS) last month China's CPI rose 1.9 percent year on year. This
compares to an investment analysts' forecast of 1.5 percent.
The majority of economists interviewed by China Daily
said that during the festival season from December to February the
price of all food items was likely to remain high.
NBS figures show the CPI last month rose 1.8 percent in urban
and 2.1 percent in rural areas. This indicates higher prices for
farm products.
In fact food prices recorded the highest rise, up 3.7 percent
year on year, compared to just 1 percent for non-food items.
Cereals were up 4.7 percent, edible oil 6.2 percent, meat and
poultry 7.6 percent and eggs 11.7 percent.
The central government has moved to stabilize grain prices in
the last few weeks by releasing state grain stocks to the market.
The move was necessary to maintain social harmony especially during
the festival season, Wang Jinmin, an official with the State
Council Development Research Centre, told China Daily.
Grain price rises were likely to level off in a few weeks. But
the cost of fruit and vegetables would continue to edge upwards,
according to a forecast by the Ministry of Commerce.
China's food price rises have been fuelled by investor
enthusiasm in biofuel production particularly of ethanol, according
to Xu Weiping, an information officer with the Ministry of
Agriculture.
There’s been a rising demand for grain as an industrial material
with the nation enjoying good summer and autumn harvests, according
to NBS grain output reports.
The FAO report said the world's rising cereal prices were due to
a growing demand for biofuel production and poor harvests in some
countries.
Commenting on China's role, an FAO commodity analyst called
Abbassian, told China Daily that the country’s selling or
buying would "have a great impact" on the world's food prices.
If China had exported more corn to the international market the
world price wouldn’t have gone up so sharply, Abbassian said. By
not having significantly increased its imports of wheat China had
helped the world price remain stable.
(China Daily December 12, 2006)