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National Bureau of Statistics will release October price data at 9:30 on November 9.
For the growth rate of CPI in October, institutions predict that pig prices will continue to rise in October, while vegetable prices will fall; the growth rate of in October's CPI may slow down year-on-year compared with . In terms of PPI, institutions believe that the expectation of global economic recession hits the price of commodity . Combined with the impact of high base, PPI in October is likely to continue to decline year-on-year and turn negative.
CPI year-on-year growth rate may slow down
CPI, many institutions predict that the prices of major consumer goods in October will "grow more and fall less", pork prices will continue to rise hedge vegetable prices will fall, and the year-on-year growth rate of CPI in October may slow down.
Data from the National Bureau of Statistics showed that China's consumer price (CPI) rose 2.8% year-on-year in September.
Data source: National Bureau of Statistics
For the year-on-year growth rate of CPI in October, the predicted values of the Macro Research Department of Industrial Research, CICC Macro, and Zhejiang Securities Li Chao's macro team were 2.2%, 2.5% and 2.4% respectively.
CICC Macro said that CPI was the highest point this year in September, and pig prices are expected to rise and fruit and vegetable prices weaken, and industrial consumer goods prices slowed down as PPI slowed down. At the same time, the base of service prices was not low last year, and there was still some suppression this year (National Day), and (service prices) may also slow down year-on-year.
Industrial Research Macro Research Department also stated that the prices of major consumer goods rose more and fell less in October. After the pig price rose by 6% month-on-month in September, the increase in in October further expanded in October, and reached 11.8% month-on-month. In October, vegetable prices fell significantly after the temperature dropped, down 5.5% month-on-month.
specifically depends on the pork price. Li Chao, a macro team of Zhejiang Securities, said that in late October, the national average pork price of , the Ministry of Agriculture and Rural Affairs, exceeded 40 yuan/kg, continuing the upward trend in September. Since May, the stock of sows has grown slowly. Due to the constraints of the pig growth cycle, short-term pig supply is difficult to recover. In addition, the arrival of the peak consumption season has increased the market expectations of farmers. The frequent occurrence of pen-pressing weight gain and secondary fattening has led to further amplification of the supply and demand gap and continued to rise in pig prices.
Li Chao's macro team also said that the prices of feed such as soybean meal and corn have risen significantly, driving pig prices up from the cost side. On October 21, the National Development and Reform Commission stated that the current average weekly price of lean meat retail prices in 36 large and medium-sized cities has entered the first-level warning range for excessive increase. In order to ensure supply and stabilize prices, the sixth batch of central pork reserves will be put into place this year, which will alleviate the situation of pork supply shortage to a certain extent.
In terms of poultry meat and egg prices, Li Chao's macro team said that the price of eggs has increased significantly, which has certain support for the CPI month-on-month in October. Due to the low inventory of laying hens in September, market expectations for the off-season consumption have led to low enthusiasm for farmers to restock, and the demand for eggs has increased. Coupled with the rise in pork prices, the supply and demand gap has driven egg prices to continue to rise. In late October, egg wholesale prices have exceeded the high in 2019. Since mid-October, the weather has been suitable, the growth of vegetables is good, the supply has rebounded, demand weakened after the holiday, and vegetable prices have begun to fall.
Li Chao's macro team said that due to the impact of overseas avian influenza superimposed on customs clearance, the introduction of breeding chickens faces continuous insufficient pressure, and the egg price in October was 1.5% month-on-month, and has now reached its peak in the past five years.
According to Wande data, the average forecast of the year-on-year growth rate of CPI in October by 21 institutions was 2.4%, down 0.4 percentage points from September, with a forecast range of 2% to 3.1%; of which 18 institutions predicted a year-on-year increase in CPI in October. In terms of
PPI year-on-year growth rate may turn negative
PPI, many institutions believe that the expectation of a global recession impacts commodity prices, coupled with the impact of a high base, the PPI in October is likely to turn negative year-on-year.
Data from the National Bureau of Statistics showed that China's industrial producer ex-factory price (PPI) rose 0.9% year-on-year in September.
For the year-on-year growth rate of PPI in October, the predicted values of the Macro Research Department of Industrial Research, CICC Macro, and Li Chao's macro teams of Zhejiang Securities were -1.4%, -1.5% and -1.7% respectively.
, director of Yingda Securities Research Institute, said that under the double negative factors of the upward base and the downward trend of , coupled with the downward trend of global macroeconomic , the downward trend of global commodity prices is expected to continue to decline significantly in October on the basis of September.
Zheng Houcheng said that the price index of major raw materials rose by 2 percentage points to 53.3 in October, while the ex-factory price index rose by 1.6 percentage points to 48.7 in October. Although both are up from the previous values, and the price index of major raw materials continues to rise on the boom and bust line, in the context of the upward base in the same period in 2021 and the downward trend of the tail factor, considering the sharp decline of the black system, it is expected that the October PPI year-on-year period will continue to decline on the basis of September.
CICC Macro said that international oil prices and copper prices both fell in October, and coal prices also fell after the peak season. Infrastructure and insurance housing have made efforts to make black products rebounded. However, due to the high base brought by the shortage of coal and electricity last year, the base effect of in October this year will drag down the PPI by 2.5 percentage points lower than the previous month compared with the previous month. The October PPI contained in the price of PMI is likely to turn negative year-on-year.
specifically depends on the impact of oil prices. The Macro Research Department of Industrial Technology said that after crude oil price continued to fall for several consecutive months, it showed a phased rebound driven by OPEC's production cuts beyond expectations, but the rebound amplitude was relatively weak.
Li Chao's macro team also said that the US dollar continues to strengthen, and the conflict between Russia and Ukraine is gradually falling under the influence of global economic recession expectations. Affected by the decision of OPEC+ countries to cut production by 2 million barrels in November, market expectations for short-term energy shortages have intensified. Coupled with the uncertainty of oil supply caused by the European oil embargo on Russia, crude oil prices rose sharply in early October. The United States has once again increased its strategic oil inventory, and supply tension has slowed down, but it has little impact on the overall crude oil supply and demand pattern.
In terms of the prices of other industrial products, the Macro Research Department of Industrial Technology Research stated that there was differentiation within the black products, with threads, coke and iron ore -1.9%, 1.4%, and -3.3% month-on-month. non-ferrous metals has not had much rise or fall throughout the month, and it maintained the narrow fluctuation of trend. Overall, the cardinal effect may be the main influencing factor of the year-on-year PPI in October.
Li Chao's macro team said that more industrial products prices fall, less rise. From a structural perspective, energy prices remain tough, while prices of midstream varieties such as steel, non-ferrous metals, and industrial raw materials continue to decline.
Li Chao's macro team also stated that the inventory level is relatively low and coal prices continue to rise. In October, some coal companies began to shut down security inspections, and coal production was lower than expected. In addition, at the end of September, Daqin Railway launched a 25-day centralized maintenance, with the average daily transportation volume declining, and coal transportation faced major obstacles. At the same time, in late October, the inventory of Qinhuangdao ports had fallen to 4.33 million tons, and the coal inventory of multiple ports fell, increasing the coal supply and demand gap.
According to Wande data, the average forecast of the year-on-year growth rate of PPI in October by 20 institutions is -1%, lower than 1.9 percentage points in September, with a forecast range of -1.7% to 1.5%; of which 18 institutions predict a year-on-year increase in PPI in September.
