China: Inflation hits nearly eight-year high in November, stoked by African swine fever
Consumer prices rose 0.4% in November, below October’s 0.9% rise. The print mostly reflected higher prices for pork due to the outbreak of African swine fever in August 2018. Pork prices have jumped around 110% in the last 12 months.
Against this backdrop, Yi David Wang, head of China economics at Credit Suisse, noted that:
“Meat prices across all categories including pork, beef and lamb have continued to rise, likely due to substitution effects. The good news on pork prices was that recent pork price has decreased from average 52.69 RMB/kg in October to 35.8 RMB/kg in November. Given that authorities are taking measures to support pig farmers and to lower pork prices, the impact on inflation from pork price will be mitigated in 2020.”
Inflation shot up from 3.8% in October to 4.5% in November. The print was above market analysts’ expectations of 4.3% and the highest rate since January 2012. Annual average inflation rose from 2.5% in October to 2.7% in November.
Annual producer prices (PPI), meanwhile, fell 1.4% year-on-year. The print was above both October’s 1.6% decline and the 1.5% drop that market analysts had expected.