The Observer of Morocco & Africa China – The rise in the price of pork flames inflation

The consumer price index rose 3% in September. This is prompting China to buy US agricultural products.

Soaring pork prices pushed Chinese inflation to its highest level in six years in September. This complicates Beijing's efforts to stimulate growth, but also encourages it to buy more US agricultural products.
The consumer price index rose 3 percent in September over the previous year, according to data released Tuesday by the National Bureau of Statistics, calling into question Beijing's inflation target of about 3% "this year. The rise in consumer prices accelerated after the 2.8% rise in August, exceeding the average forecast of 2.9% growth by economists surveyed by The Wall Street Journal.

The main factor is soaring pork prices, up 69% from the previous year, the fastest rise in 12 years. That contributed to more than half of the rise in the CPI in September, the statistics bureau said. African swine fever, a highly contagious virus that kills pigs but is not contagious to humans, has severely affected pork production in China, the world's largest producer and consumer of pork. The rapid surge in pork and CPI prices has already prompted Beijing to purchase more pork and related agricultural products in foreign markets, such as the United States. The increase in purchases of US agricultural products could solve one of the main complaints of the Trump administration in relation to trade with China and moderate the surge in food prices in the United States.
Chinese pork imports in September jumped 72% from a year earlier, following a 76% increase in August, according to data presented by The Wall Street Journal based on reports released Monday by the Chinese Customs Bureau . The high-level trade talks between China and the United States in recent days have resulted in a truce. President Trump has said he will give up tariffs on Chinese imports if Beijing decides to buy $ 40-50 billion worth of US agricultural products. Due to the long trade war, Chinese purchases of agricultural products in the United States fell to $ 8.6 billion in 2018, down from an annualized average of $ 21 billion between 2012 and 2017, Sunday announced the investment company CICC in a report.
In September, food prices in China increased by 11 percent from the previous year, the highest pace in almost eight years, while non-food prices fell to 1 percent after a rise of 1.1% in August.
"The danger of prolonged food inflation is that it may affect inflation expectations"said Ning Zhang, an economist at UBS. Policymakers will struggle to control inflation if consumers become accustomed to ever-rising prices, he said.
At the same time, the rise in producer prices in China further slowed in September, due to lower commodity prices, the statistics bureau said. The producer price index fell 1.2% year-over-year in September, compared with a 0.8% decline in August.
"The Chinese authorities will have to be vigilant about inflationary consumption fueled by pork. However, Beijing will likely maintain a cautious easing policy aimed at stimulating economic growth "Zhang said. In a meeting with provincial governors on Monday, Chinese Premier Li Keqiang said the Chinese economy was under increased pressure due to weak demand, slowing growth in some localities and soaring prices of some food products. He urged local officials to resist the pressure and stabilize prices and job growth in order to achieve China's economic goals this year.
A survey of economists by The Wall Street Journal expects economic growth in China to post a further slowdown of 6.1 percent in the third quarter, the slowest pace in more than 25 years. The National Bureau of Statistics will publish figures on growth and other economic data this Friday