China’s producer price growth moderated from the fastest pace in more than eight years in March as consumer inflation ticked upward despite the continued impact on food prices from an early bumper crop of fresh vegetables.
The seventh straight month of expansion for China’s producer price index, published by the National Bureau of Statistics, came in at 7.6 per cent, slowing by 0.2 percentage points from February and dead-on a median forecast from economists surveyed by Reuters.
In month-on-month terms producer price growth halved to 0.3 per cent. That reflected a continued fallback in price rises for oil and gas extraction as well as chemicals and chemicals products, which offset gains by producers of ferrous and nonferrous metals.
Consumer costs edged higher as the official consumer price index registered year-on-year rise of 0.9 per cent, up from 0.8 per cent in February but just shy of an expected 1 per cent rise.
In month-on-month terms, consumer prices fell 0.3 per cent, slightly sharper from contraction of 0.2 per cent a month prior and in line with expectations.
The statistics bureau attributed the month-on-month deflation to a continued fall in food prices, a sub-index for which dropped 2.4 per cent in March and dragged the headline figure down by 0.74 percentage points. Pork prices fell 3.5 per cent and fresh vegetables dropped 7.9 per cent, continuing a fall prompted by unusually warm temperatures across the country, which led to unexpectedly early bumper crops starting in February.
The mild year-on-year rise by consumer inflation was blamed on a 4.4 per cent drop in food prices, with vegetable prices down 27 per cent thanks in part to a cold snap that damaged crops early last year. Non-food inflation rose 2.3 per cent.