Chinese inflation moderated in August, data showed Wednesday, as a slowdown in the surging price of pork tempered food costs.
The consumer price index (CPI) hit 2.4%, in line with forecasts and below the previous month’s reading, as pork saw its slowest increase in a year, while analysts said the easing could also be attributed to a high base comparison.
Dong Lijuan at the National Bureau of Statistics, which released the figures, said pork supplies had improved but noted that the cost of other meats also rose, “affected by factors such as rising feed costs, recovery in demand and rising pork prices.”
The price of pork, a staple in China, has been soaring for more than a year after the country’s pig herds were ravaged last year by African swine fever, which forced the culling of at least a million animals.
The meat’s price rose 52.6% on-year in August, a slowdown from the 85.7% surge in July and more than 100% earlier in 2020.
“The falling CPI inflation was mainly driven by a sharp slump in pork prices on-year, thanks to a high base and rising weight of pork in the CPI basket,” Nomura’s Lu Ting said.
A national campaign to curb mounting food waste in August sparked speculation that the country’s food supply outlook is worse than the government admits – exacerbated by swine fever, the coronavirus outbreak and this year’s heavy flooding which destroyed huge swathes of farmland.
Customs data published earlier this week showed that Chinese meat imports had increased by more than 70% this year.
The NBS said industrial production continued to improve and prices of commodities such as oil, iron ore and non-ferrous metals grew – allowing for improvements in the producer price index (PPI).
The PPI, which measures the cost of goods at the factory gate, fell 2.0% in August, largely in line with forecasts.
Factory gate prices had previously been dragged by fallout from the coronavirus pandemic, but started rising again in June – with analysts noting a recovery in industrial demand.