Driven by the snowstorms and surging demand during the Chinese Lunar New Year holiday, rising food
prices may have pushed China's January consumer price index (CPI)
growth to another monthly high, said the China Securities
Journal quoting analysts on Wednesday.
Zu Jianfang, a macro-economy analyst with CITIC Securities, said
that given the?foregoing factors and a relatively low figure
last January, the year-on-year growth of CPI may reach 7.4 percent
in January. The CPI growth may be 7.1 percent for the first quarter
and five percent for the whole year.
Meanwhile, investment bank Goldman Sachs drew a similar
conclusion. Rising food prices in snow-hit areas and demand during
the holiday may have driven the CPI growth to 7.1 percent in
January, it said in a report, adding that the figure for the first
quarter will remain above seven percent.
Although the monthly consumer price index figures are scheduled
to come out early next week, a series of statistics from the
National Development?and Reform?Commission (NDRC) may, to
some extent, support the above forecast.
Rising food prices
According to a recent NDRC survey covering 36 major Chinese
cities, prices of meat, eggs, edible oil, and vegetable went up in
January over the previous month. While service prices remained
stable.
Specifically, wheat and flour prices in these cities remained
stable; while meat and egg prices rose widely. Retail prices of
pork, deboned beef, mutton, chicken, and eggs grew by 4.53 percent,
9.51 percent, 4.36 percent, 1.81 percent and 0.28 percent
respectively over last December.
Meanwhile, retail prices of bean oil, rap oil and bottled peanut
oil grew 9.14 percent, 8.63 percent and 4.81 percent respectively.
Average prices of 15 kinds of major vegetables reached 4.04 yuan
per kilogram (kg), up 5.21 percent over last December.
In contrast, among 37 major service items surveyed, prices of 32
items remain stable. Average price of liquefied natural gas fell
1.89 percent to 6.76 yuan per kg.
PPI growth to shrink
According to NDRC data, average coal prices at major mines were
480 yuan per ton, up 5.93 percent over last December. Steel product
and nonferrous metal prices went up in general, while major
chemical product prices remained flat.
However, the lagged effects of falling oil prices on the
international market may drag down January's producer price index
(PPI) growth a bit, said Li Huiyong, a macro-economic analyst with
Shenyin Wanguo Securities.
Either way, since prices of the?foregoing industrial
products do not fell substantially, January PPI growth is not
likely to go below five percent from 5.4 percent from last
December, Li added.
(Chinadaily.com.cn February 14, 2008)
