China's consumer prices fall in November as pork prices decline

BEIJING, Dec. 9 (Xinhua) -- China's consumer price index (CPI), a main gauge of inflation, dipped 0.5 percent year on year in November as pork prices further declined, data from the National Bureau of Statistics (NBS) showed on Wednesday.

In the first 11 months, the country's CPI rose 2.7 percent from the same period a year earlier, staying within the government's annual target of around 3.5 percent.

The CPI edged down 0.6 percent on a monthly basis, compared with the 0.3-percent drop registered in October.

Food prices fell 2 percent year on year last month, reversing the 2.2-percent increase in October and contributing about 0.44 percentage points to the CPI drop, said Dong Lijuan, a senior statistician with the NBS.

Dong said the weakening food prices were the main factor that dragged the country's CPI into negative territory.

In breakdown, pork prices plunged 12.5 percent from a year earlier, exceeding the October decline by 9.7 percentage points. The prices of eggs, chicken and duck saw widening year-on-year drops in November, while those of vegetables and fruits climbed 8.6 percent and 3.6 percent year on year respectively in November.

"Although CPI inflation was negative in November, this does not mean that China's economy is experiencing deflation," said Lu Ting, chief China economist with Nomura, in a research note.

The recent year-on-year changes in the CPI are "less meaningful," considering a huge base effect caused by the surge of pork prices in the fourth quarter of 2019, Lu noted.

In November, pork prices went down 6.5 percent month on month due to recovering hog production, narrowing from the 7-percent decline in October.

A report by Huatai Securities expected pork prices to continue to retreat along with rising supply, which is likely to be the main drag for food CPI until the second or third quarter of 2021.

Besides pork prices, experts said the slump of global crude oil prices was also an important driver of the decline in headline CPI inflation.

Excluding food and energy prices, China's core CPI edged up 0.5 percent in November, with the growth rate remaining the same for five consecutive months, according to the NBS.

Wednesday's data also showed China's producer prices saw a narrowed decline in November amid a steady recovery in industrial activities.

The producer price index, which measures costs for goods at the factory gate, fell 1.5 percent year on year in November, following a 2.1-percent drop in October. Enditem