The National Bureau of Statistics released data on the December 2019 national CPI (Consumer Price Index for Residents) on January 9. On a month-on-month basis, December CPI moved from November's rise per cent to flat. On a year-on-year basis, CPI rose%, the same as in November, with food prices up% and non-food prices up%. CPI rose% from 2018 in 2019, meeting its expected target of keeping CPI inflation at around 3%.
In December 2019, the CPI rose and flattened, with food prices, especially pork, one of the main factors. Shen Yun, senior statistician at the city division of the National Bureau of Statistics, said food prices had shifted from a rise in November to a fall in%, affecting the CPI by about a percentage point. With the positive changes in pig production, the central and local reserves of pork have been put in, the volume of imports has increased, the tight supply of pork has been further alleviated, and prices have shifted from a rise of% in November to a decline of%, affecting the CPI by about a percentage point. Under the impact of a drop in pork prices, beef and lamb prices fell back from% and% to% and chicken and duck prices from up% and% to down% and%, respectively.
On a year-on-year basis, CPI rose% in December 2019, the same as in November. Among them, food prices rose%, the increase fell a percentage point, affecting CPI rise about a percentage point. In food, fresh fruit prices fell by%, expanding by a percentage point. Pork prices rose%, or a percentage point. Beef, lamb, chicken, duck and egg prices rose between% and%, all falling to varying degrees. The price of fresh vegetables rose by%, an increase that has widened. The core CPI, which deducts food and energy prices, rose% year-on-year, the same as last month.
“The risk of a rapid rise in pork prices prior to the Spring Festival has been controlled in the context of greater state regulation and a good job of securing and stabilizing pork prices. Huatai Securities macro chief analyst Li Chao said.
However, there is still some upward pressure on prices in the short term. Wen Bin, chief researcher at Minsheng Bank of China, said that on the one hand, the arrival of the Spring Festival will continue to drive up food prices, with high-frequency data showing a slight rise in pork prices and an upward trend in the prices of agricultural basket since January 2020. On the other hand, uncertainties in the international environment have increased, with the current price of Brent crude oil breaking through $70 per barrel, and there is still the possibility that it will continue to rise in the next phase.
“Pork supply is gradually recovering, oil prices are unlikely to continue to rise, and there is no need to worry too much about inflation. Yang yewei, a southwestern securities firm, said the current stock of pig stocks and sow stocks are being steadily restored, the spring festival may briefly push up pig prices, pork prices will gradually fall after the festival and drive inflation down.
Looking ahead to 2020, the agency generally believes that with pig capacity gradually recovering, pork prices are likely to fall quickly after the second half of 2020, CPI increases will follow.
Wang Qing, chief macro analyst at Dongfang Jincheng, said that given that the main factor affecting CPI in 2019 was a sharp rise in pork prices and alternatives prices, rather than a small and stable change in food prices, judging the 2020 CPI trend, the change in the swine fever epidemic is a key factor. CPI is expected to be \"high before and low\" in 2020, with year-on-year gains still expected to be around%.