PPI up record 10.7% on soaring commodity prices
CHINA’S September factory gate inflation rose to a record on soaring commodity prices, but consumer inflation remained generally stable.
The producer price index rose 10.7 percent from a year earlier in September, the National Bureau of Statistics said yesterday, the biggest rise since the bureau started compiling the data in 1996.
The faster expansion of PPI last month was due to the price rises in coal and products of some energy-intensive industries, said the NBS.
Among the major sectors, coal mining and washing, oil and gas extraction, petroleum, coal and other fuel processing, chemical raw materials and products manufacturing as well as ferrous and non-ferrous metal smelting and processing contributed around 80 percent of the increase in PPI inflation in September.
Prices rose in 36 out of 40 industrial sectors last month, up from 32 sectors in August. Prices in mining and coal jumped 74.9 percent, up sharply from August’s 57.1 percent rise.
Underpinning producer prices, global commodity prices surged in recent months, driven by increased demand for coal and metals as economies around the world reopened after being shut due to the COVID-19 pandemic. Labor shortages and transportation bottlenecks have also lifted prices globally.
Adding to the price pressures in China, widespread power cuts in September disrupted output across the cement, steel and aluminum industries. China’s power crunch has stemmed from a coal shortage and record prices of fuel.
The data also showed the consumer price index rose 0.7 percent year on year in September, slowing from a 0.8 percent increase in August.
The slower growth was partly driven by a drop in food prices, which declined 5.2 percent year on year last month. In particular, the price of pork, a staple meat in China, slumped 46.9 percent from a year earlier, said senior NBS statistician Dong Lijuan.
CPI stayed flat on a monthly basis. Food prices dropped 0.7 percent while non-food prices rose 0.2 percent. Market demand and supply remained broadly steady in September, and consumer prices maintained stability, said Dong.
Considering the relatively weak residential consumption this year and the downward cycle of pork prices, the CPI growth for the fourth quarter will generally remain mild, said Huang Wentao, an analyst with China Securities.
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