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China: Inflation accelerated slightly in April
Tue, May 13 2008, 12:41 GMT
by Flemming J. Nielsen
Consumer prices in April accelerated slightly to 8.5% y/y (consensus: 8.2%) from 8.3% y/y in March. During recent months the overall picture has shown some stabilisation of inflation at the current high levels. Inflation in China continues to be mainly related to food as, surprisingly, food price inflation accelerated to 22.1% y/y from 21.4% y/y in March (see chart 2). There has been some normalisation in food price inflation since the harsh winter storms in early 2008 as prices increases for fresh vegetables have dropped sharply to 13.6% y/y in April after peaking at 45.3% y/y in February. March (see chart 2). Meat prices remain the main issue for food prices. Meat, poultry and related products increased 47.9% y/y in April after increasing 45.8% y/y in March. However, we believe meat price inflation will decline significantly during the summer because of both an increasing meat supply and the base impact from higher meat prices. In the media there has been a lot of focus on global rice prices recently. This is no major issue in China because China is a net exporter of rice and has been able to control domestic rice prices by curbing exports. Grain including rice increased 7.4% y/y in April.
Published on Tue, May 13 2008, 12:42 GMT
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