Cost of food leads to record city prices
By Wang Yanlin |
May 14, 2011, Saturday
|
Print Edition
Print Edition
SHANGHAI'S consumer prices rose to a record high in more than two years with food costs one of the main drivers, the Shanghai Statistics Bureau said yesterday.
The Consumer Price Index, the main gauge of inflation, expanded 5.1 percent from a year earlier in April, up from 4.7 percent in both March and February.
The trend was in contrast with the national level where China's CPI growth moderated to 5.3 percent last month from March's 5.4 percent, a 32-month high.
"Shanghai's inflation is running at a rather high level," the bureau said in a note yesterday. "Rising food costs and expenditure related to residency such as rental fees led April's advance of prices."
Food costs, which account for almost 30 percent of the CPI basket, climbed 9.9 percent year on year last month, up from 9.7 percent in March. Residency spending grew 5.1 percent on an annual basis in April.
Cai Xuchu, the bureau's chief economist, said earlier that consumer prices in the city may stay at this level for a while as the economy was showing no sign of an abrupt slowdown.
National measures
To control runaway price increases, China ordered commercial banks to set aside more money as reserves on Thursday. It was the fifth rise in the reserve requirement ratio this year, together with two interest rate rises.
Apart from such national measures to trim market liquidity, the Shanghai government has been beefing up efforts to guarantee the supply of various products. It also strengthened supervision to prevent price-fixing and hoarding.
The city has carried out a set of policies since the middle of last year, including streamlining the distribution process to cut costs, providing subsidies for producers to boost supply, and enhancing regulations to punish speculators who distorted prices.
Last week, Unilever China was fined 2 million yuan (US$308,000) for talking to media about potential price rises, triggering panic buying of personal care products.
But with oil and commodity prices falling on the global market, some analysts expect inflation to ease.
In the first four months, Shanghai's consumer prices gained 4.7 percent from a year earlier, slower than the national average of 5.1 percent.
The Consumer Price Index, the main gauge of inflation, expanded 5.1 percent from a year earlier in April, up from 4.7 percent in both March and February.
The trend was in contrast with the national level where China's CPI growth moderated to 5.3 percent last month from March's 5.4 percent, a 32-month high.
"Shanghai's inflation is running at a rather high level," the bureau said in a note yesterday. "Rising food costs and expenditure related to residency such as rental fees led April's advance of prices."
Food costs, which account for almost 30 percent of the CPI basket, climbed 9.9 percent year on year last month, up from 9.7 percent in March. Residency spending grew 5.1 percent on an annual basis in April.
Cai Xuchu, the bureau's chief economist, said earlier that consumer prices in the city may stay at this level for a while as the economy was showing no sign of an abrupt slowdown.
National measures
To control runaway price increases, China ordered commercial banks to set aside more money as reserves on Thursday. It was the fifth rise in the reserve requirement ratio this year, together with two interest rate rises.
Apart from such national measures to trim market liquidity, the Shanghai government has been beefing up efforts to guarantee the supply of various products. It also strengthened supervision to prevent price-fixing and hoarding.
The city has carried out a set of policies since the middle of last year, including streamlining the distribution process to cut costs, providing subsidies for producers to boost supply, and enhancing regulations to punish speculators who distorted prices.
Last week, Unilever China was fined 2 million yuan (US$308,000) for talking to media about potential price rises, triggering panic buying of personal care products.
But with oil and commodity prices falling on the global market, some analysts expect inflation to ease.
In the first four months, Shanghai's consumer prices gained 4.7 percent from a year earlier, slower than the national average of 5.1 percent.
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