Source of this article: Times Weekly Author: Alimire
Data released by the National Bureau of Statistics on October 14 showed that in September, the year-on-year increase of the national consumer price index (CPI) expanded, up 2.8%; the month-on-month increase of changed from a decrease of 0.1% last month to a rise of 0.3%. On average from January to September, CPI rose 2.0% compared with the same period last year.
In terms of national industrial producer ex-factory price (PPI), in September, the month-on-month decline of PPI narrowed, and the year-on-year increase continued to decline. Specifically, PPI rose 0.9% year-on-year and 0.1% month-on-month. On average from January to September, PPI rose by 5.9% compared with the same period last year, and industrial producer purchase prices rose by 8.3%.
"In September, all regions and departments continued to coordinate the prevention and control of the epidemic and economic and social development, and took various measures to ensure the supply and price stability of important livelihood commodities, and the overall operation of the consumer market of residents was stable; the prices of commodities such as international crude oil continued to decline, demand in some domestic industries rebounded, and the overall price trend of industrial products declined, but the downward trend slowed down." Dong Lijuan, senior statistician of the Urban Department of the National Bureau of Statistics.
According to estimates, in the year-on-year increase of CPI of 2.8% in September, the tail-strike impact of price changes last year was about 0.8 percentage points, and the impact of new price increases was about 2.0 percentage points. Excluding food and energy prices, the core CPI of rose 0.6% year-on-year, down 0.2 percentage points from the previous month.
Source: National Bureau of Statistics official website
CPI rose 2.8% year-on-year, and pork and fruits and vegetables rose more and more. With the implementation of the policy of ensuring supply and stabilizing prices, although pork and vegetables fluctuate in the short term, the overall market for livelihood necessities is sufficient.
Data from the National Bureau of Statistics shows that in September, among CPI's foods, from a month-on-month perspective, affected by high temperature and rainy weather, the price of fresh vegetables rose by 6.8%, an increase of 4.8 percentage points from the previous month, affecting the CPI's rise by about 0.14 percentage points, accounting for more than 40% of the total month-on-month increase of CPI.
Source: National Bureau of Statistics official website
Pork consumption demand rebounded seasonally, and under bullish expectations, some farmers were reluctant to sell, and prices continued to rise. However, under the influence of measures such as central reserve pork, the rise in the middle and late quarters slowed down, with an average increase of 5.4% for the whole month.
Among non-foods, the prices of industrial consumer goods turned from a decrease of 0.7% last month to a flat price. Affected by the downward trend of international oil prices, domestic gasoline and diesel prices fell by 1.2% and 1.3% respectively. In addition, service prices fell from the same period last month to a decrease of 0.1%. Due to the end of the summer vacation and the outbreak of the epidemic, cross-regional travel has decreased, and the charging prices of air tickets, hotel accommodation and travel agencies fell by 9.9%, 2.9% and 1.3% respectively. In terms of
PPI, under the influence of factors such as the continued effectiveness of supply and price stability measures, PPI fell by 0.1% month-on-month, a decrease of 1.1 percentage point from the previous month. Among them, affected by the downward trend in international crude oil prices, the prices of related domestic industries have declined, and the prices of oil and natural gas mining industries have fallen by 3.8%. At the same time, with the gradual implementation of infrastructure investment projects, demand in metals, cement and other related industries has rebounded, and the price decline has narrowed.
Source: National Bureau of Statistics official website
Zhou Maohua, a macro researcher at the Financial Market Department of Everbright Bank, said in an interview with the Times Weekly reporter that although prices rose in September, due to the active smooth logistics and transportation in China, ensuring market supply and stabilizing prices, although pork and vegetables plummeted in the short term, the overall supply of essential goods for people's livelihood is sufficient, and CPI continued to be within 3.0% year-on-year .
"Powered by the expansion of the price increase of pork and vegetables, the rebound in seasonal consumption and local extreme climate impacts disturb the short-term supply of the two; non-food prices are mild, and the core CPI is in the '1 era' year-on-year, which also reflects to a certain extent that the overall consumption demand is weak." Zhou Maohua said. In terms of
PPI, Zhou Maohua analyzed that the PPI in September further fell to 0.9% year-on-year, mainly due to the further decline in prices of energy, raw materials and other commodities in September. The effect of domestic supply-saving and price-stabilizing policies and measures, coupled with the impact of last year's high base. The year-on-year slowdown will help alleviate the investment costs of some mid- and downstream manufacturing industries, stimulate the vitality of micro-subjects, and promote employment and consumption.
From the trend perspective, PPI may continue to decline year-on-year, mainly due to the slowing outlook for the global economic recovery, the rising risk of stagflation in Europe and the United States, and the tightening of overseas financial environment, international commodities continue to be under pressure and the high base last year, which will drive the year-on-year trend of PPI to slow down.
The upward space for pork prices in the fourth quarter is limited
Since the beginning of this year, the continuous rebound of pig prices has brought hope to various pig companies.
According to China Pig Raising Network, on October 13, the average price of live pigs was 27.16 yuan/kg (13.58 yuan/catties), an increase of 14.84% month-on-month; an increase of 131.15% year-on-year. Pig prices in most areas have risen into the "13 yuan/catties era".
Source: Tuchuang Creative
As part of the measures to ensure supply and stabilize prices, starting from the end of August, the National Development and Reform Commission has actively regulated the pig market, ensured sufficient supply in the market, and stabilized pig prices. On October 9, the National Development and Reform Commission announced that the country will release the fifth batch of central pork reserves this year in the near future.
Zhou Maohua told the Times Weekly reporter that the recent rise in pork prices is mainly due to the recovery of domestic catering service demand, and the increase in seasonal consumption demand has driven the rise in pork prices. In addition, some farmers are reluctant to sell and secondary fattening, which has caused certain fluctuations in the supply of domestic pig market.
"Pork prices are different from previous cycles. Domestic pig production capacity has basically returned to normal year levels. With the strengthening of market supply and demand regulation and guidance in China, the supply and demand of the pork market is basically balanced, and pork prices do not have the basis for a significant increase; from the perspective of higher pig inventory and the number of sows that can be reproduced than usual, the market has expectations for an oversupply next year." Zhou Maohua said.
Looking ahead to the fourth quarter, in Zhou Maohua's view, it is expected that CPI will rise slightly year-on-year in the fourth quarter, fluctuating around 3.0%; PPI may continue to slow down year-on-year.
Zhou Maohua said that driven by the recovery of domestic demand and holiday factors, the prices of daily consumer goods and other products have risen to a certain extent, but domestic demand is in the recovery stage, grain harvests have been bumper years, pig production capacity is in a reasonable range, and the supply of daily necessities for residents is sufficient. In addition, the overall price base rose in the fourth quarter of last year, prices remained moderate and controllable.
Among them, regarding the highly-watched pork price issue, Zhou Maohua believes that the overall pork price will rise in the fourth quarter, but the upward space is expected to be very limited. "The supply and demand gap is not large, and in the fourth quarter, due to weather changes and holiday effects, pork demand often has a seasonal increase, as well as fluctuations in the stock of breeding sows and the reluctance of a few farmers to sell, etc., which has a certain disturbance to the market supply and demand in the fourth quarter. Furthermore, from the profits of this round of pork breeding, the support for a sharp rise in prices is not strong." Wen Bin, chief economist of China Minsheng Bank, also told the Times Weekly reporter that as the monetary policies of major economies continue to tighten, the future international commodity prices will change from the previous unilateral rise in to wide fluctuations, and the overall external inflation pressure faced by my country is reduced. However, he also emphasized that given that there is still great uncertainty in the global geopolitical situation, especially after the arrival of winter, the contradiction between energy shortage in the United States and Europe may intensify, and the comprehensiveness and high viscosity of inflation in Europe and the United States cannot be ignored, and the probability of external inflation remain high in the fourth quarter is relatively high.
"At the same time, my country's inflationary pressure will begin to weaken." Wen Bin pointed out that in terms of CPI, food, especially pork prices, are still an important support force, but with the effective effectiveness of government's frozen pork reserves and other regulatory measures, the room for further increase in the future will be reduced. In terms of core inflation, the continued decline in September was less than expected, and the future recovery still needs to rely on the recovery of domestic demand. Finally, due to the high base last year, the possibility of the year-on-year CPI growth rate turning to a downward trend in October and November has increased. In terms of
PPI, Wen Bin believes that the year-on-year growth rate decline effect brought about by the rise in the base in the fourth quarter was strong, while the pressure of input inflation has weakened compared with the previous period. In addition, downstream demand is weak, it can basically be determined that PPI will enter the deflation range.
"As a result of the overall pressure on commodity prices, domestic supply and price stability measures to stabilize domestic commodity raw materials prices. Coupled with the base effect of in last year, PPI is expected to slide into the negative value area year-on-year.Among them, in terms of commodities, the main overseas major central bank hikes rate hikes, tightening of the financial environment, and rising risk of recession in the global economy, continue to suppress commodity prices. "Zhou Maohua said.
It is worth noting that the scissor gap between CPI and PPI in the fourth quarter is expected to enter the negative area. The narrowing of the scissor gap will help alleviate the production cost pressure of some mid- and downstream manufacturing enterprises, thereby stabilizing and boosting the business confidence of enterprises, and helping to boost the vitality of micro-subjects. Not only that, the narrowing of the scissor gap will also help relieve the pressure of upstream and downstream price transmission and reduce the risk of input inflation.
