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Price hike for foodstuff, mainly grain, meat and fowl and eggs, contributed significantly to the rise of China's consumer price index (CPI) in the first half of this year, Li Xiaochao, spokesman with the National Bureau of Statistics, told a press conference Thursday.

 

The major inflation indicator rose 4.4 percent in June compared with a year ago, or up 0.4 percent on the previous month.

 

This helped jack up CPI for the first half of this year by 3.2 percent on the same period of last year. The growth rate was 1.9 percentage points higher than the year-earlier level.

 

In breakdowns, foodstuff prices rose 7.6 percent, with grain price up 6.4 percent, egg price up 27.9 percent and prices for meat and fowl as well as related products up 20.7 percent. However, prices of fresh vegetables and fruits went down 2.9 percent from a year earlier.

 

Li Xiaochao noted foodstuff prices contributed 2.5 percentage points to the CPI rise in the January-June period. He said deducting prices of foodstuff and energy, China's core CPI rose only 0.9 percent. Price hikes for foodstuff focused on grain, meat and fowl and eggs, Li added.

 

According to Li, the grain price rise was due largely to the rising grain prices on international markets and growing demand both at home and abroad.

 

Under the price hike on international grain markets, he said, China imported 800,000 tons of cereal in the first five months of this year, down 51.5 percent from a year earlier, and exported 5.06 million tons, up 53.5 percent.

 

China built some biological fuel projects over the past few years, which also gave rise to domestic demand for grain, Li said.

 

Meanwhile, means of production for agricultural products experienced a price rise of 5.2 percent in the first half of this year, a rate 3.9 percentage points higher than the year-earlier level.

 

This also helped push up grain prices, Li said.

 

In terms of prices of meat and fowl, Li said, rises for pork prices were the most noticeable, which was a result of cost being driven up by price hikes for feedstuff, transport fee and increasing pay for workers and short supply caused by narrow profit margin.

 

Pig blue-ear disease outbreaks in 20-odd provinces and autonomous regions also affected the supply, Li noted.

 

He added that there existed potential risks for CPI to go further up in the second half of this year.

 

According to Zhuang Jian, a senior economist with the China office of Asian Development Bank, continuous CPI rises at a high level will have little influence on rich people, but affect low-income earners. Zhuang believed the central government will take strong measures to maintain economic and social stability.

 

According to NBS data, on year-on-year term, CPI was up 2.2 percent in January, up 2.7 percent in February, up 3.3 percent in March, up 3.0 percent in April and up 3.4 percent in May. The first quarter CPI stood at 2.7 percent.

 

In related developments, retail prices of commodities rose 2.4 percent in the first half of this year, or up 3.2 percent in June. Factory prices of industrial products increased by 2.8 percent in the six-month period, or up 2.5 percent in June. Buying prices of raw materials, fuels and power supply went up 3.8 percent in the January-June period, or up 3.4 percent in June.

 

(Xinhua News Agency July 19, 2007)