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China’s July food prices jumped 9.1% consumer staples pork prices up 27% fresh and fruit prices up 39.1% from a year ago. Overall, China’s consumer inflation rose 2.8% from a year ago and producer prices fell 0.3% from a year ago. Economists say there is no problem.

Chinese Vegetables

The data from the National Bureau of Statistics was released Friday. Soaring pork prices amid the spread of African swine fever has been well covered but what is particularly scary is fresh fruit prices rose 39.1%. Much of the Chinese government agricultural reform in the past year has been increasing fruit production and yet in that time prices have risen nearly 40%.

That was the highest rate since February 2018 boosted by the fastest increase in food prices since January 2012.

Food inflation highlights

  • Pork prices jumped 27 percent after a 21.1 percent climb in June.
  • Fresh fruits jumped 39.1 percent vs 42.7 percent in June
  • Fresh vegetables rose 5.2 percent vs 4.2 percent last mobht
  • Eggs jumped 10.5 percent vs 6.2 percent last month
  • Edible oil rose 0.4 percent vs 0.1 percent last month.

The July figures follow an 8.3% year-on-year jump in June. Non-food items in July were 1.3% higher, government data showed. The Chinese fruit supply has been hurt by severe weather that hurt crop production with apple prices soaring. China is the world’s largest producer and a major consumer of apples, one of the world' staple fruits.

The official inflation data was released AFTER China confirmed Tuesday it will be suspending imports of agricultural products from the U.S. in response to President Donald Trump’s new tariffs. U.S. exports of fruits to China have already been falling in the last year with fresh fruit exports falling to $123 million from July 2018 to June 2019, down by about half from $239 million the previous year, data from the U.S. Department of Agriculture (USDA) showed.

The USDA said in a June report that the U.S. remained China’s top Northern Hemisphere supplier for apples even with a 50% tariff on the import of the fruit. Overall, China’s Consumer Price Index (CPI) rose 2.8% from a year ago in July, slightly higher than the 2.7% analysts in a Reuters poll had expected.


The need to eat and with surging pork prices pushing up consumer price inflation there is weakening demand elsewhere. Producer price inflation fell into negative territory last month as a result.

Producer Price Index fell 0.3% in July from a year ago, compared to the 0.1% decline analysts in the Reuters poll had expected. Indeed that was the first time China’s PPI fell in three years, adding to concerns of deflationary risks in the world’s second largest economy. It is not hard to argue China faces the worse of both worlds.

From The TradersCommunity Research Desk

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