Commodities Buzz: China Inflation Continues to be Mild in May

With consumer price growth continuing to be mild and factory prices of industrial products slightly edging up in May, Chinas inflation remains benign. National Bureau of Statistics (NBS) data showed Saturday that Chinas consumer price index, a main gauge of inflation, rose 1.8 percent year-on-year in May. NBS statistician Sheng Guoqing mainly attributed the rise to carry-over effects, with new price-rising factors contributing only 0.4 percentage points. Food prices edged up by 0.1 percent, resulting in a growth of 0.01 percentage points in the price index. Non-food prices rose by 2.2 percent, generating a rise of 1.74 percentage points.

Although the prices of eggs and vegetables and mutton surged by 24.7 percent, 10 percent and 13.5 percent, respectively, the price hikes have been largely offset by the decline in fruit and pork prices, according to Sheng. In May, the price of pork and fruit dropped by 16.7 percent and 2.7 percent, respectively, dragging down food prices by 0.48 percentage points. As for non-food prices, the costs of health care products grew by 5.1 percent while that of education and housing jumped by 2.7 percent and 2.2 percent, respectively. On a month-on-month basis, consumer prices fell by 0.2 percent, following the same decline in April.