The latest government data shows an across-the-board rise in food prices in China, pointing to the possibility of a rapid rebound in consumer prices and a delayed economic recovery.
In a survey of major foodstuffs published by the Ministry of Commerce on Aug. 30, the prices of rice, oil, meat, eggs and vegetables during the seven day period of Aug. 20-26 rose in 36 cities across the country.
Among them, the price of packaged rice grew 0.3% from the week before, while that of peanut oil grew 0.5%, the report showed.
The prices of pork, beef and mutton rose 0.38%, 0.6% and 0.2%, respectively, while the wholesale prices of 18 types of vegetable increased 1.2%. Egg prices rose the most at 3%, according to the
Ministry of Commerce, which expects the trend in the price of eggs to continue.
Niu Li, a researcher from State Information Center, attributed the price rise to severe droughts among the world's major food exporters, which has led to lower output. Food prices will grow further if the prices of livestock feed and corn rise, according to Niu.
There was bound to be a decline in food production given the major droughts in the United States,
Russia and Argentina, Niu said, adding that Russia and Argentina have been facing their biggest droughts in decades.
Liu Yonghao, the chairman of livestock supplier New Hope Group, was pessimistic about the outlook for the cattle and agriculture industries in the second part of this year. The drought in the US would drive down food output and increase raw material prices, driving up meat and egg prices in turn, Liu said. However, he dismissed the prospect of a sharp increase in food prices.
Analysts expect the August consumer price index, which will be published in the next few days, to rise 2% from the same period a year ago.
Responding to these forecasts, Niu said consumer prices could rebound earlier than expected, while economic recovery could be delayed, given the negative outlook presented by most economic indicators
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