Widespread snowstorms buffeting the country may further drive up
consumer prices if disrupted travel on roads and rail is not
restored soon, economists have said.
The disruption has caused a shortage of food and agricultural
products, the Ministry of Commerce said on its website, while the
Ministry of Agriculture said the wholesale price index of
agricultural products surged to 174.8 points yesterday, up from 155
points on Jan 1.
"These developments will likely push up near-term CPI
inflation," Liang Hong, an economist with Goldman Sachs in Hong
Kong, said.
The consumer price index (CPI) rose 4.8 percent last year, the
highest rise in more than a decade. Food, which accounts for a
third of the CPI basket, was a main driver of the inflation.
Recently, the government has introduced several measures, including
a temporary price freeze on some products, to prevent the price
hikes evolving into overall inflation.
"Prices will rise further if transportation is not restored
quickly," Chen Jijun, an analyst with CITIC Securities, said.
The Ministry of Commerce said this week that local authorities
can deploy food reserves to deal with intense market
fluctuations.
Local suppliers have also been urged to increase production of
cooking oil, meat, eggs and vegetables.
(China Daily January 29, 2008)