China’s inflation slightly gained pace in November, with factory gate prices increasing the most for more than four years, bolstered by coal prices.
China’s Producer Price Index, or ex-factory gate prices, increased at 3.3% year on year, the most in five years. It is also the third consecutive month of increases following nearly five years of decline. With China being the world’s top exporter, it is exporting inflation at a rate faster than expected.
Beijing will be watching coal prices, which jumped by a staggering 28.6% in November from a year earlier. Last week, China said it wanted to maintain the price at between 500 and 600 yuan per metric ton (US$72.74-$86.96 per metric ton). And last month, China’s state planning agency pressured coal producer and utilities to agree long-term deals to stabilize coal prices.
Prices in the mining sector, an indicator of the cost of raw materials, rose 14.8% in November from a year ago, the third consecutive month of increases. Like coal, this points to an uptrend following nearly five years of decline.
Food prices leads to CPI’s increase
Rising food prices were behind the 0.1% uptick in the Consumer Price Index to 2.3% in November from the same period last year, the second straight month of increases above 2%.
Food prices gained 4% in November compared with last year, according to a release by the National Bureau of Statistics on Friday. Prices, including items such as cigarettes and alcohol, rose 3.2% from last year, while fresh vegetables soared by a huge margin of 15.8% from a year ago.
Non-food prices gained 1.8%, which is the biggest increase since January 2014, while the services industry rose 2.4%, pointing to higher prices for consumers.