China Consumer Prices hit a two-year High

According to official statistics issued on Wednesday, the Consumer price index in China reached a two-year high in July as hog prices increased once more. Pork prices, a Chinese staple item, increased 20.2% in July compared to the same month last year. According to government statistics accessible through Wind Information, it was the first rise since September 2020.

The report revealed that hog prices had their greatest month-over-month increase on record, rising by 25.6%. According to a statement released by Bian Shuyang, an agricultural products analyst at Nanhua Futures, farmers’ hesitation to sell in the hopes of receiving greater prices in the future was a factor in the spike in hog prices in July.

Bian anticipates it will be challenging for hog prices to rise above July’s levels. According to Bian, two Chinese holidays in September and October will contribute in sustaining Consumer demand for pork. The expert claims that the fact that live hog farmers are now making a profit is a sign that there will be an increase in supply. Since there have been so many new producers and terrible diseases to contend with, pork prices have fluctuated significantly over the past three years. According to the National Bureau of Statistics, fresh fruit and vegetable prices increased in July by 16.9% and 12.9%, respectively, over the same month last year.

Even though food prices increased, Wednesday’s inflation figures showed that China’s economy was still experiencing weak demand. According to economists surveyed by Reuters, the headline Consumer price index increased by 2.7% in July, falling short of forecasts for a 2.9% gain. According to Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, “Non-food prices actually decreased in July [by 0.1%] from their June level, which suggests poor demand.” The lack of additional policy support and the Covid outbreaks in several locations, he claimed, “may have contributed to poorer growth in July.”