(Yicai Global) July 9 -- China's consumer price index, a key gauge of inflation, ticked up 1.1 percent in June from the same period last year, less than the 1.22 percent growth forecast by an Yicai Global poll of chief economists, as the price of pork crashed, according to the latest data.

June’s CPI growth was 0.2 percentage point less than in May, the National Bureau of Statistics said today.

The price of pork plunged 36.5 percent last month year on year, a widening of 12.7 points from May.

Pork prices should stabilise or even rise in the third and fourth quarters, said Sun Binbin, chief analyst in fixed income at TF Securities. The central and local governments have started to purchase the meat to boost pork reserves and help shore up prices. Demand should also grow as it is off-peak season at the moment, he added.

Even through the price of crude oil gained, driving up consumer inflation, the impact of sliding pork prices was greater, Zheng Houcheng, director of Yingda Securities Research Institute, told Yicai Global.

Core CPI, which does not include food and energy prices, stayed stable at 0.9 percent, the same as May, the NBS said.

Factory Prices

Meanwhile, the industrial producer price index, an indicator of corporate profitability, added 8.8 percent last month from the same period last year, more than the 8.64 percent forecast by the Yicai Global survey of chief economists. This was a slowdown of 0.2 point from May, the NBS said.

China's bulk commodity supply and price stabilization policies started to take effect in June, resulting in a better supply and demand balance and a slowdown in the surge in industrial product prices, said Dong Lijuan, senior statistician at the NBS.

The PPI is not likely to come down in the second half, Zheng said. International oil and copper prices are trending upwards, and China’s aim to reach carbon neutrality will lend support to the ferrous metal market.

The oil and natural gas extraction industry grew 53.6 percent in June, a slump of 45.5 points from the previous month.

Prices in the ferrous metal smelting and rolling processing industry surged 34.4 percent in June, a drop of 3.7 points. Prices in the nonferrous metal smelting and rolling processing industry soared 27.8 percent, down 2.6 points.

Editor: Kim Taylor