Chinese inflation sneaks closer to global shoppers

Foshan Haitian Flavouring and Food Co

21/10/2021 02:51

(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
    By Yawen Chen
    HONG KONG, Oct 21 (Reuters Breakingviews) - The country’s
consumer prices stayed flat despite soaring commodity costs.
That’s due to volatile pork prices and weak local spending. But
the energy crisis and strong exports raise the risk that
stretched manufacturers pass the higher costs on to customers at
home and beyond.  
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    CONTEXT NEWS
    - China’s National Development and Reform Commission, the
country’s state planner, said in a statement on Oct. 19 that it
will take “all necessary measures” to bring record high fuel
prices down to a "reasonable range". Chinese laws allow the
State Council, China's cabinet, and regional governments to
limit profit rates and set price limits when prices for
important goods or services rise sharply.
    - The NDRC said the current price increase for coal is still
showing a further irrational upward trend, and has “completely
deviated from the fundamentals of supply and demand". 
    - China’s largest soy sauce maker by sales, Foshan Haitian
Flavouring & Food, will raise the retail prices of its soy
sauce, oyster sauce and other products by 3%-7% from Oct. 25,
citing higher costs of raw materials, transport and energy,
according to a Shanghai exchange filing dated Oct. 13.
    - China’s producer price index rose 10.7% from a year
earlier in September, the National Bureau of Statistics said on
Oct. 14, the biggest rise since the bureau started compiling the
data in 1996. The consumer price index meanwhile rose 0.7%
year-on-year in September, slowing from a 0.8% increase in
August and is below a 2021 government target of around 3%.

 (Editing by Robyn Mak and Katrina Hamlin)
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