There is no threat of high inflation despite recent steep rises
in food prices, a senior planning official said yesterday.
The rising consumer price index (CPI), driven up largely by more
expensive food, will become stable when pork prices stabilize, Bi
Jingquan, vice-minister of the National Development and Reform
Commission, told a press conference in Beijing.
The CPI - a key gauge of inflation - hit a 10-year high of 5.6
percent in July and rose by an average of 3.5 percent in the first
seven months of the year, of which 2.9 percentage points were
contributed by rising food costs, he said.
Pork, in particular, was 70.3 percent more expensive year on
year at the end of August in 36 large cities, according to the
commission's statistics.
The rise was mainly because of a rise in animal-feed prices and
the blue-ear epidemic which shrunk the stock of pigs.
"There are ups and downs in the prices of other goods, but not a
continuous rise because demand has not vastly exceeded supply," he
told the news briefing held by the State Council Information
Office.
"Therefore, there is no serious inflation."
The country has experienced only some structural short supply,
such as that of pork, but overall supply and demand in the economy
is balanced, he said.
A series of government measures are stabilizing pork prices, but
this does not necessarily mean the overall inflation rate will
recede to the full-year target of 3 percent in the short term, he
said.
"The 3 percent target set at the beginning of this year is only
a guideline, it's natural that the actual data are below or above
that target."
Pork prices stabilized in the past three weeks because of
improved supply, but fluctuations in the meat market are
inevitable, he said.
The odds are low that pork rates would continue to rise
drastically for a long time, he said.
The skewed supply-demand situation with livestock is expected to
be substantially balanced by mid-2008, he said.
Farmers have been given incentives - increased price and
government subsidies - to raise more pigs.
Meanwhile, supply of alternative food is sufficient. The output
of poultry, eggs and mutton has increased this year, he said.
The official ruled out the possibility of large volumes of pork
imports to ease prices.
The country produced 53 percent of the world's total pork last
year. It imported 30,000 tons and exported 95,000 tons through July
this year.
"Because China is the world's largest pork producer, the country
is very unlikely to import pork by the millions of tons every year
- there is simply no country that could satisfy such as a huge
need."
(China Daily September 5, 2007)
