/China consumer prices hit a two-year high

China consumer prices hit a two-year high

China’s consumer price index hit a two-year high in July as pork prices rebounded, according to official data released Wednesday.

Prices of pork, a food staple in China, rose by 20.2% in July from a year ago. It marked the first increase since September 2020, according to official data accessed through Wind Information.

In fact, pork prices posted their largest month-on-month surge on record — up by 25.6%, the data showed.

Farmers’ reluctance to sell — in hopes of getting higher prices in the future — contributed to July’s pork price surge, said Bian Shuyang, agricultural products analyst at Nanhua Futures, in a statement.

China’s CPI print for last month was still the highest since July 2020, when the index also rose by 2.7%, according to Wind data.

China’s inflation data has run far below that of the U.S., which is set to release its consumer price index data overnight. Economists polled by Dow Jones expect the U.S. consumer price index to rise by 8.7% in July from a year ago, down from 9.1% in June.

Wednesday’s data showed China’s producer prices continued to moderate, also coming in below expectations.

The 4.2% year-on-year increase reported for July missed the Reuters’ poll forecast of 4.8% growth.

“Falling PPI inflation also points to limited potential upside to CPI inflation” in China, Nomura’s chief China Economist Ting Lu said in a note.

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