China factory-gate inflation hits record again

[BEIJING] China's factory-gate inflation hit a 26-year high in October while consumer inflation rose on the back of soaring energy prices and coronavirus outbreaks, official figures showed Wednesday.

Factory inflation in the world's second-biggest economy has been rising for four straight months. In September, it made the biggest jump in more than two decades as high commodity prices piled pressure on businesses.

The reopening from lockdowns around the world has ramped up energy demand just as stockpiles are low, with supply struggles made worse by China's drive to meet environmental targets.

The producer price index (PPI), which measures the cost of goods at the factory gate, rose more than expected to 13.5 per cent in October, said the National Bureau of Statistics.

"In October, the rise in PPI expanded due to the combination of imported global factors and the tight supply of major domestic energy and raw materials," said NBS senior statistician Dong Lijuan in a statement.

PPI reached 10.7 per cent on-year in September, the highest on record in NBS data since the mid-1990s.

Dong added that 36 out of 40 industrial sectors surveyed saw price increases, including spikes in coal mining and oil and natural gas extraction.

The consumer price index (CPI), a key gauge of retail inflation, meanwhile picked up more than expected in October after four months of decline.

CPI rose 1.5 per cent on-year - up from 0.7 per cent in September and higher than a Bloomberg forecast of analysts predicted.

This was due to the "combined effects of unusual weather, mismatch in demand and supply of certain products, as well as rising capital costs", Dong said.

On a monthly basis, vegetable costs surged due to rainy weather, coronavirus outbreaks and rising transportation costs, she said.

AFP