摘要
Chart 1 shows China＇s official l year-on-year （y/y） rate of CPI inflation （6.4% in June）, as ＇well as what the figure wouldbe if pork prices are excluded （4.70%6）. In short, the recent increase in y/y pork prices is one of the main factors driv- ing up official CPI. Pork accounts for about 10% of the approximately 30% weighting of food in the CPI basket, which means that pork accounted for an extraordinary 27% of June＇s 6.4% CPI inflation reading, according to our cal- culations.
Pork prices are rising because of macroeconomic pressures,as well as disease and a supply squeeze. In y/y terms,we forecast that pork prices will plateau from August after base effects kick in. We could see another pig glut in H2-2012,lasting for 18-21 months.
