Meat, Fruit, Eggs and Vegetables in a Tug-of-War, As Mild Inflation for the Year Gradually Approaches
Xinhua News Agency, Shanghai, October 10 (Reporters Chen Aiping and Yuan Junbao) Data released by the National Bureau of Statistics on the 10th show that in October 2014, the national consumer price level rose 1.6 percent year on year and was flat month on month. Among agricultural products, the prices of fresh eggs and fresh fruit rose year on year,
Xinhua News Agency, Shanghai, October 10 (Reporters Chen Aiping and Yuan Junbao) Data released by the National Bureau of Statistics on the 10th show that in October 2014, the national consumer price level rose 1.6 percent year on year and was flat month on month. Among agricultural products, the prices of fresh eggs and fresh fruit rose year on year, while the prices of fresh vegetables and fresh meat fell year on year. Prices of some non-food goods edged up slightly.
Overall, factors such as a stable monetary environment and generally stable-to-declining prices of agricultural products are gradually turning the market expectation of “mild inflation for the whole year” into reality.
Meat, Fruit, Eggs and Vegetables in a Mutual “Tug-of-War”
Agricultural product prices were locked in a mutual “tug-of-war” in October, with fresh eggs and fresh fruit still “charging ahead” while fresh vegetables and fresh meat “beat a retreat”: egg prices and fresh fruit prices rose 16.4 percent and 15.2 percent year on year respectively, driving the overall consumer price level up by about 0.14 and 0.3 percentage points; pork prices and fresh vegetable prices fell 3.1 percent and 7.2 percent year on year respectively, pulling the overall consumer price level down by about 0.10 and 0.24 percentage points.
According to monitoring data from the Ministry of Agriculture, as of the last week of October, the national average price of eggs rose 18.6 percent year on year, with the average price of eggs in major producing provinces such as Hebei and Liaoning even rising 26.2 percent year on year.
The rise in fresh fruit prices is even more keenly felt by residents: reporters visited several large commercial supermarkets and vegetable markets in Shanghai, where Fuji apples sold for 9.98 yuan to 12.98 yuan per jin, 1 yuan to 3 yuan more expensive than in the same period last year. “Buying fruit now is like buying by the piece!” said Liu Hua, a retired Shanghai auntie, who spent nearly 30 yuan on just 3 apples.
By contrast, mild weather created favorable conditions for vegetable prices to fall. Yu Qiumei, a senior statistician at the Urban Survey Department of the National Bureau of Statistics, said the national average temperature in October was higher than in the same period in normal years, which was conducive to vegetable growth and also pushed vegetable prices lower month on month.
Vendors at the Guangyuan Road vegetable market in Shanghai said that compared with August and September, the prices of some leafy vegetables had roughly “halved”; bok choy that previously cost more than 3 yuan per jin and chicken-feather greens that cost more than 4 yuan per jin now cost less than 2 yuan and 3 yuan per jin respectively.
In addition, reporters learned from Shanghai Agricultural Products Central Wholesale Market Co., Ltd. that the wholesale price of pork (white-strip pork) at the market in October fell further compared with August and September, with the current average price at 18.28 yuan per kilogram, also lower than the level in the same period last year.
Rising Prices of Non-Food Goods Should Not Be Underestimated
Although most agricultural product prices stopped rising, driving food prices down 0.2 percent month on month in October, it is worth noting that the rise in prices of some non-food goods, whether month on month or year on year, is gradually making its impact felt on the price level and on residents' consumer spending:
Among these, the most notable was clothing prices, which rose 2.4 percent year on year, only slightly below the increase in food prices. Among them, clothing processing service fees rose 5.3 percent, and clothing prices rose 2.4 percent. On a month-on-month basis, clothing prices rose 1 percent, a significantly larger increase than other categories.
“With the change of season, it is expected that clothing prices would rise, but now coats easily cost over a thousand yuan and leather shoes easily cost over a thousand yuan; even with mall promotions offering spend-and-save discounts, they still cost 500 yuan to 600 yuan, which is really hard to bear.” said Xu Jin, a white-collar worker in Shanghai, who spends half a month's salary on a single seasonal clothes shopping trip.
In addition, the prices of household services and higher education rose 9.0 percent and 3.8 percent respectively; housing rent prices rose 2.7 percent year on year, also exceeding the increase in food prices.
Among the four major categories of people's daily life, “clothing, food, housing and transportation”, only the price of “transportation” fell: as international crude oil prices fluctuated downward and domestic refined oil prices were cut, the prices of vehicle fuel, gasoline and diesel fell 5.6 percent and 7.8 percent year on year respectively.
“Mild Inflation” for the Whole Year Gradually Approaches
From January to October this year, consumer prices rose 2.1 percent, and the market expectation of “mild inflation for the whole year” is gradually becoming clear.
Pan Xiangdong, chief economist at Galaxy Securities, analyzed that the economy still shows insufficient effective demand, monetary policy is prudent with targeted easing, and liquidity's impact on prices remains limited; affected by U.S. monetary policy, international commodity prices are at low levels, and imported inflationary factors are relatively small. Meanwhile, non-food prices are within a normal fluctuation range, and no greater-than-expected impact has been foreseen for the time being.
At the same time, it is a widely shared market expectation that agricultural product prices, which have a relatively large impact on CPI changes, will generally not rise significantly.
Relatively speaking, the current inventory of laying hens is low, and overall the situation of egg supply falling short of demand is difficult to change, so egg prices are expected to rise again in the future. However, the impact of firm egg prices on the overall price level will be offset by declines in other goods.
Wang Xia, an analyst at the Shouguang Vegetable Index Center, believes that as southern vegetable varieties gradually increase their market supply, vegetable prices will find it difficult to rebound if they are not affected by unusual weather.
Experts at the Shandong Provincial Animal Husbandry and Veterinary Information Center believe that recent factors such as continuously declining pig prices and disease outbreaks have led to concentrated releases of live pigs for slaughter, while slaughtering enterprises have shown no obvious momentum in stockpiling, making it difficult for the pig market to find obvious support and prolonging its weakness.
Tang Jianwei, senior macroeconomic analyst at Bank of Communications, said that the key to the year-on-year change in CPI lies in the fluctuation of newly price-raising factors. From the current perspective, against the background of economic growth stabilizing while slowing, newly price-raising factors in the year-on-year CPI in the fourth quarter will not rise significantly.
Overall, factors such as a stable monetary environment and generally stable-to-declining prices of agricultural products are gradually turning the market expectation of “mild inflation for the whole year” into reality.
Meat, Fruit, Eggs and Vegetables in a Mutual “Tug-of-War”
Agricultural product prices were locked in a mutual “tug-of-war” in October, with fresh eggs and fresh fruit still “charging ahead” while fresh vegetables and fresh meat “beat a retreat”: egg prices and fresh fruit prices rose 16.4 percent and 15.2 percent year on year respectively, driving the overall consumer price level up by about 0.14 and 0.3 percentage points; pork prices and fresh vegetable prices fell 3.1 percent and 7.2 percent year on year respectively, pulling the overall consumer price level down by about 0.10 and 0.24 percentage points.
According to monitoring data from the Ministry of Agriculture, as of the last week of October, the national average price of eggs rose 18.6 percent year on year, with the average price of eggs in major producing provinces such as Hebei and Liaoning even rising 26.2 percent year on year.
The rise in fresh fruit prices is even more keenly felt by residents: reporters visited several large commercial supermarkets and vegetable markets in Shanghai, where Fuji apples sold for 9.98 yuan to 12.98 yuan per jin, 1 yuan to 3 yuan more expensive than in the same period last year. “Buying fruit now is like buying by the piece!” said Liu Hua, a retired Shanghai auntie, who spent nearly 30 yuan on just 3 apples.
By contrast, mild weather created favorable conditions for vegetable prices to fall. Yu Qiumei, a senior statistician at the Urban Survey Department of the National Bureau of Statistics, said the national average temperature in October was higher than in the same period in normal years, which was conducive to vegetable growth and also pushed vegetable prices lower month on month.
Vendors at the Guangyuan Road vegetable market in Shanghai said that compared with August and September, the prices of some leafy vegetables had roughly “halved”; bok choy that previously cost more than 3 yuan per jin and chicken-feather greens that cost more than 4 yuan per jin now cost less than 2 yuan and 3 yuan per jin respectively.
In addition, reporters learned from Shanghai Agricultural Products Central Wholesale Market Co., Ltd. that the wholesale price of pork (white-strip pork) at the market in October fell further compared with August and September, with the current average price at 18.28 yuan per kilogram, also lower than the level in the same period last year.
Rising Prices of Non-Food Goods Should Not Be Underestimated
Although most agricultural product prices stopped rising, driving food prices down 0.2 percent month on month in October, it is worth noting that the rise in prices of some non-food goods, whether month on month or year on year, is gradually making its impact felt on the price level and on residents' consumer spending:
Among these, the most notable was clothing prices, which rose 2.4 percent year on year, only slightly below the increase in food prices. Among them, clothing processing service fees rose 5.3 percent, and clothing prices rose 2.4 percent. On a month-on-month basis, clothing prices rose 1 percent, a significantly larger increase than other categories.
“With the change of season, it is expected that clothing prices would rise, but now coats easily cost over a thousand yuan and leather shoes easily cost over a thousand yuan; even with mall promotions offering spend-and-save discounts, they still cost 500 yuan to 600 yuan, which is really hard to bear.” said Xu Jin, a white-collar worker in Shanghai, who spends half a month's salary on a single seasonal clothes shopping trip.
In addition, the prices of household services and higher education rose 9.0 percent and 3.8 percent respectively; housing rent prices rose 2.7 percent year on year, also exceeding the increase in food prices.
Among the four major categories of people's daily life, “clothing, food, housing and transportation”, only the price of “transportation” fell: as international crude oil prices fluctuated downward and domestic refined oil prices were cut, the prices of vehicle fuel, gasoline and diesel fell 5.6 percent and 7.8 percent year on year respectively.
“Mild Inflation” for the Whole Year Gradually Approaches
From January to October this year, consumer prices rose 2.1 percent, and the market expectation of “mild inflation for the whole year” is gradually becoming clear.
Pan Xiangdong, chief economist at Galaxy Securities, analyzed that the economy still shows insufficient effective demand, monetary policy is prudent with targeted easing, and liquidity's impact on prices remains limited; affected by U.S. monetary policy, international commodity prices are at low levels, and imported inflationary factors are relatively small. Meanwhile, non-food prices are within a normal fluctuation range, and no greater-than-expected impact has been foreseen for the time being.
At the same time, it is a widely shared market expectation that agricultural product prices, which have a relatively large impact on CPI changes, will generally not rise significantly.
Relatively speaking, the current inventory of laying hens is low, and overall the situation of egg supply falling short of demand is difficult to change, so egg prices are expected to rise again in the future. However, the impact of firm egg prices on the overall price level will be offset by declines in other goods.
Wang Xia, an analyst at the Shouguang Vegetable Index Center, believes that as southern vegetable varieties gradually increase their market supply, vegetable prices will find it difficult to rebound if they are not affected by unusual weather.
Experts at the Shandong Provincial Animal Husbandry and Veterinary Information Center believe that recent factors such as continuously declining pig prices and disease outbreaks have led to concentrated releases of live pigs for slaughter, while slaughtering enterprises have shown no obvious momentum in stockpiling, making it difficult for the pig market to find obvious support and prolonging its weakness.
Tang Jianwei, senior macroeconomic analyst at Bank of Communications, said that the key to the year-on-year change in CPI lies in the fluctuation of newly price-raising factors. From the current perspective, against the background of economic growth stabilizing while slowing, newly price-raising factors in the year-on-year CPI in the fourth quarter will not rise significantly.