Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

China’s Producer Prices Surge Alongside Soaring Commodities

Published 11/05/2021, 03:55
Updated 11/05/2021, 03:55
© Reuters.

© Reuters.

(Bloomberg) -- China’s factory-gate prices surged more than expected in April, supported by gains in commodity prices and a low base of comparison from last year, while consumer inflation remained relatively subdued.

The producer price index rose 6.8% from a year earlier, the highest since October 2017, following a 4.4% gain in March, the National Bureau of Statistics said Tuesday. The median forecast was for a 6.5% increase. Consumer prices increased 0.9% on year, slightly below the 1% gain projected by economists.

The commodities boom, fueled by rising global demand and supply shortages, has stoked concerns about inflation around the world. As the world’s biggest exporter, rising PPI in China is another risk to global inflation as manufacturers start passing on higher prices to retailers.

Central bankers from the U.S. Federal Reserve on down maintain that price gains are temporary. In China, policy makers insist the impact of commodity prices on the domestic economy will be limited and that price growth remains generally under control. Still, officials have pledged to strengthen controls on the raw materials market to limit costs to companies.

Click here for a breakdown of China’s April producer prices

Consumer inflation remained relatively amid lower pork prices, a key element in the country’s CPI basket.

The People’s Bank of China is seeking to scale back the stimulus it pumped into the economy during the pandemic last year, worried by the build up of debt. Economists expect policy makers to slow the pace of credit expansion rather than raise interest rates. The Communist Party’s Politburo, the top decision-making body, said last month there won’t be any sharp reversal of macroeconomic policies.

China aims to keep its consumer inflation at around 3% this year, but an NBS official said in a recent interview that the headline index is expected to be “significantly lower” than the official target in 2021.

©2021 Bloomberg L.P.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.