(Yicai Global) March 10 -- China’s consumer prices fell for a second straight month in February as the cost of pork was much lower than it was a year ago because of increasing supply. Producer prices surged.

The Consumer Price Index fell 0.2 percent last month, according to data the National Bureau of Statistics released today, after dropping 0.3 percent in January. But February’s decline was less than anticipated. Chief economists at 20 major financial institutions in China polled by Yicai Global had expected a 0.43 percent drop.

Livestock and meat prices fell 7.3 percent in the month, with the cost of pork slumping almost 15 percent, NBS data showed. The core CPI, which excludes volatile food and energy prices, was flat after falling 0.3 percent in January.

New price hikes were offset by a high base set a year ago during the Covid-19 pandemic, said Dong Lijuan, a senior statistician at the NBS. Last year’s numbers pulled the CPI 1.8 percentage point lower, while new price gains boosted the index 1.6 point, resulting in an overall dip of 0.2 percent, he said.

As for factory gate prices, a key indicator of corporate profitability, they rose more than expected last month. The Producer Price Index added 1.7 percent after snapping an 11-month contraction in January. The economists surveyed by Yicai Global had forecast the PPI to climb 1.18 percent.

Carryover effects from last year pared the PPI by 0.1 point, while new price increases added about 1.8 point, Dong said.

Consumer prices seem to have started to settle this year after rising for most of 2020, whereas factory gate prices mainly slid last year. In the first two months of 2021, the CPI fell 0.3 percent from a year go and the PPI was up 1 percent.

Editor: Emmi Laine, Xiao Yi