(Yicai Global) Sept. 9 -- China’s consumer price index, a key gauge of inflation, grew at a pace 0.2 percentage point less in August than in July as pork prices crashed, while the producer price index, an indicator of corporate profitability, hit a 13-year high on the surging cost of raw materials, according to the latest data.

August’s CPI ticked up 0.8 percent in August from the same period last year, the first time in three months that consumer inflation has fallen below 1 percent, the National Bureau of Statistics said today. This is less than the 1.02 percent growth forecast by an Yicai Global poll of chief economists.

Food prices, especially that of pork, were the main factors that were a drag on the CPI in August, Zheng Houcheng, director of Yingda Securities’ research institute, told Yicai Global. The price of pork plummeted 44.9 percent year on year, a widening of 1.4 percentage point from July, as supply outstrips demand.

Pork prices are likely to stay low as hog herds recover from an outbreak of African swine fever, said Luo Zhiheng, deputy director of Yuekai Securities’ research institute. Depressed spending amid the pandemic could also keep the CPI rising at a slow pace in the short term, he added.

Factory Prices

Meanwhile, factory gate prices added 9.5 percent in August from the same period last year, more than the 9 percent forecast by the Yicai Global survey of chief economists. It is the fastest growth since September 2008.

The continued recovery of the global economy and China’s tightening control over energy consumption will support commodity prices from steel and copper to oil and aluminum, according to a research report by brokerage Guotai Junan.

China’s industrial product prices are unlikely to keep rising in the future as the country has a complete industrial chain, competitive downstream products and surplus supply to demand, said Wu Chaoming, chief economist at Caixin Securities.

Prices in the coal mining and washing sector surged 11.4 percentage points in August, while that in the chemical manufacturing industry advanced 2.7 percentage points and the ferrous metal smelting and rolling processing sector gained 1.1 percentage point.

Editor: Kim Taylor