Shanghai producer prices rise
By Wang Yanlin |
November 23, 2010, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S producer prices rebounded last month, indicating rising costs at the factory gate and posing a bigger challenge for the local government in its bid to tame inflation.
The Producer Price Index grew 1.2 percent from a year earlier in October, the Shanghai Statistics Bureau said yesterday. The increase followed gains of 0.7 percent in August and 0.3 percent in September.
"Rising costs of crude oil, metal and chemical substances fueled the producer price increase," said Wang Zehua, an analyst at the bureau. "The price index may continue to expand if the upward costs can't be controlled."
Of 34 industries tracked, nearly 80 percent reported higher production costs. One example was the cost of non-ferrous metals, which rocketed 11.7 percent, up 5.5 percentage points from September.
Shanghai's Consumer Price Index, the main gauge of inflation, jumped by a yearly record of 4.1 percent last month and the rebound in producer prices indicates a rise in the price of products soon to reach the shelves and that prices could rise even higher in the following months.
The city government last week announced a batch of measures designed to curb prices. It said it would strengthen supervision over price increases, raise the market supply of daily goods, including rice, oil and meat, provide subsidies for poor families and streamline distribution to reduce costs.
The measures, together with tightening monetary policies at national level, are aimed at fighting surging inflation.
The People's Bank of China announced a rise in the reserve requirement ratio to a record 18.5 percent last Friday. It was the second time in the past two months that the central bank asked banks to set aside more money. It also announced an interest rate increase last month.
Wu Xiaoling, a member of the Standing Committee of the National People's Congress, China's top legislature, and vice chairman of its Financial and Economic Committee, said at the weekend there was still room for China to lift the reserve requirement.
China's consumer prices rose by 4.4 percent in October, the biggest increase in 25 months, and its Producer Price Index rose by 5 percent last month.
The Producer Price Index grew 1.2 percent from a year earlier in October, the Shanghai Statistics Bureau said yesterday. The increase followed gains of 0.7 percent in August and 0.3 percent in September.
"Rising costs of crude oil, metal and chemical substances fueled the producer price increase," said Wang Zehua, an analyst at the bureau. "The price index may continue to expand if the upward costs can't be controlled."
Of 34 industries tracked, nearly 80 percent reported higher production costs. One example was the cost of non-ferrous metals, which rocketed 11.7 percent, up 5.5 percentage points from September.
Shanghai's Consumer Price Index, the main gauge of inflation, jumped by a yearly record of 4.1 percent last month and the rebound in producer prices indicates a rise in the price of products soon to reach the shelves and that prices could rise even higher in the following months.
The city government last week announced a batch of measures designed to curb prices. It said it would strengthen supervision over price increases, raise the market supply of daily goods, including rice, oil and meat, provide subsidies for poor families and streamline distribution to reduce costs.
The measures, together with tightening monetary policies at national level, are aimed at fighting surging inflation.
The People's Bank of China announced a rise in the reserve requirement ratio to a record 18.5 percent last Friday. It was the second time in the past two months that the central bank asked banks to set aside more money. It also announced an interest rate increase last month.
Wu Xiaoling, a member of the Standing Committee of the National People's Congress, China's top legislature, and vice chairman of its Financial and Economic Committee, said at the weekend there was still room for China to lift the reserve requirement.
China's consumer prices rose by 4.4 percent in October, the biggest increase in 25 months, and its Producer Price Index rose by 5 percent last month.
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