NBS: China's Aug CPI rises 0.6%, but PPI falls 1.8% YoY

In August, China's Consumer Price Index (CPI) increased by 0.6% from the same period last year and gained 0.4% from July, while the Producer Price Index (PPI) declined by 1.8% on year and 0.7% on month, respectively, according to the latest data released by the country's National Bureau of Statistics (NBS) on Monday morning.

China's CPI posted further rises in August and its on-year growth continued to expand, mainly driven up by the strengthening of food prices amid short supply, explained Dong Lijuan, a senior statistician with NBS.

China CPI

"Food availability tightened under the impact of extreme heat in summer and heavy rainfall across some regions (of China)," Dong added.

Last month, Chinese food prices went up by 3.4% on month and gained 2.8% on year. Specifically, the prices of fresh vegetable, fruits, and pork increased by 18.1%, 3.8% and 7.3% respectively compared to July, while on a yearly basis they logged larger rises of 21.8%, 4.1%, and 16.1%, the NBS data showed.

However, the prices in the tourism industry retreated last month as people's travel activity weakened towards the end of Chinese students' summer vacation, according to Dong. For example, domestic prices for air tickets dropped by 5.1% on month and fell 11.9% on year.

Excluding food and energy, China's core inflation declined 0.2% on month but gained 0.3% on year in August, the data showed.

As for the gauge of manufacturing sector inflation, China's PPI slid at a faster rate in August due to the persistently weak industrial demand in China and the decline of commodity prices across the world, Dong noted. "The price drops in the high energy-consuming industries became the major drag on the PPI," Dong added.

China PPI

For example, domestic prices for the steelmaking and fabrication industry lost 4.4% on month and decreased 8% from the same period last year, as China's steel consumption remained slack in the traditional summer lull for the market.

Meanwhile, the prices in the country's oil, coal, and other fuel processing sector also fell by 2% on month and dropped 3% on year, the data showed.

Over January-August this year, China's CPI climbed 0.2% on year, while its PPI fell 1.9% from the same period last year, according to NBS statistics.

Written by Anthea Shi, shihui@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com