Food Prices Continued to Fall in May

As supply of fruits and vegetables is mounting, food prices continued its decline into May. Industry experts forecast that inflation pressure will ease in a way in May with food prices falling.

At the last count, fruit prices fell 17% on average from April 11 to April 30, a trend expected to continue in May.

Prices of mango, watermelon, melon, pineapple, and pawpaw were down 15%, 25%, 18%, 19%, and 23%, respectively. Sales volume of fruit was increased by 35% during the May Day holiday.

Vegetables prices such as tomato, carrot, and potato rose slightly during the period, while prices of green pepper, cucumber, eggplant, asparagus lettuce, and Chinese cabbage were down 7.88%, 5%, 7.25%, 6.12%, and 2%, respectively.

Latest statistics from the Ministry of Commerce indicate that the edible agriculture product price index was 126.8 in the last week of April, down 0.6% from previous week.

What is more, prices of edible agriculture products decreased 1.6% in April from March. And it is expected that food price index would down 1.6% from the same period in 2007.

Now the biggest concern of the country was the consumer price index (CPI), which has been growing steadily for seven consecutive months.

The country's CPI has jumped from 6.2 % in September, 2007 to 8.3 % this March. The price surge was mainly due to rising prices in farm produce as well as big hike in global crude oil prices.

Chinese exporters of labour-intensive products will be hit hard this year by weakening overseas demand, rising raw material prices and a stronger Chinese yuan. Further reductions in export tax rebates should therefore be avoided for the light industry and textile sectors.

Meanwhile, insiders say the government is giving priority to curbing further price increases and inflation.

It is making efforts to increase the supply of agricultural produce, while stepping up subsidies to grain farmers, as well as low-income families. The CPI is expected to fall in the second half of this year.

China has cut tax rebates on exports of some products in a move to reduce trade imbalances, but analysts have said that a global economic slowdown could trigger a plunge in Chinese exports, potentially leading to a broader economic slowdown.

The economy grew by an annual 10.6 per cent in the first quarter, slowing from 11.9 per cent in all of 2007. The trade surplus in the first quarter was USD 41.4 billion, compared with USD 46.5 billion in the first three months of 2007.

From www.cnstock.com, Page 1, Tuesday, May 06, 2008
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