China Inflation Worsens on 25.5% Farm Prices Surge
hina issued more gloomy inflation news Friday, saying prices of farm goods jumped 25.5 percent in the first quarter and housing costs rose 11 percent in March despite efforts to damp price rises that are battering ordinary Chinese.
Communist leaders, worried about a possible public backlash, are trying to ease food shortages blamed for the price spike that began in mid-2007. But winter storms disrupted that effort, and analysts expect inflation to stay high as late as May before subsides.
Retail consumer prices rose 8.3 percent in March, a slight decline from February's 8.7 percent, the highest rate in nearly 12 years. That was driven by a 21 percent rise in food costs, including a 66.7 percent increase for pork, the country's staple meat.
In its latest move, the government said Friday it will pay subsidies to encourage egg farmers to increase output and avert possible shortages that could push up prices, the official Xinhua News Agency reported.
Also Friday, the country's main planning agency, the National Development and Reform Commission said housing prices in 70 cities rose 11 percent in March compared with the same month last year.
That was despite government efforts to discourage speculation and push developers to create more housing for low-income families.
The rise in wholesale farm prices was driven by a 62.1 percent jump in the cost of pork and 36.5 percent for beans over the same period last year, the National Bureau of Statistics reported. The figures represent the price of goods as they leave the farm for sale to food processors or in farmers' markets.
The government has made a national priority of reining in consumer inflation, which is hitting China's poor majority hard in a society where families spend up to half their incomes on food. Bouts of high inflation in the 1980s and '90s ignited demonstrations.
Beijing has imposed controls on retail prices of many food items and is trying to bring down wholesale costs by encouraging farmers to produce more pork and grain.
But rising costs to food processors and retailers is increasing pressure to pass on the burden to consumers. Two major dairies were given permission last month to raise prices, and the government says it will consider appeals from other suppliers.
Egg farmers will get subsidized vaccines, help rebuilding following winter storm damage and other aid, Xinhua said, citing a Cabinet announcement. It said the statement gave no other details.
Poultry farmers are being forced out of business because of low prices, Xinhua said, and the government fears an egg shortage similar to the one for pork last year that drove up prices.
Beijing already has promised similar aid to pig farmers to raise pork production.
04/18/2008 07:01 AM
By JOE McDONALD AP Business Writer
BEIJING
A Chinese shopper looks at rice at a supermarket in Xi'an, Shaanxi province, China, Thursday, April 17, 2008. China issued more gloomy inflations news Friday, saying prices of farm goods jumped 25.5 percent in the first quarter and housing costs were up 11 percent in March despite efforts to damp price rises that are battering ordinary Chinese.
(AP Photo/Color ChinaPhoto)
hina issued more gloomy inflation news Friday, saying prices of farm goods jumped 25.5 percent in the first quarter and housing costs rose 11 percent in March despite efforts to damp price rises that are battering ordinary Chinese.
