A GREATER supply of staple food, particularly rice, could slow inflation in China in mid-1995, says an agriculture expert.
The increase in food prices put 37.6 points on the Consumer Price Index over the past year and contributed greatly to the October inflation figure of 27 per cent.
Lu Mai, a research fellow at the Hong Kong Polytechnic University and former agriculture official at a branch of the State Council, said yesterday the high inflation rate was triggered by more expensive rice.
Within a matter of days, in late November and early December last year, the price of rice increased by 20 to 40 per cent.
This fluctuation in price was a result of incongruence in supply and demand in the market, which was caused by state regulatory policies, not a shortage in the production.
State measures had laid down a uniform price for rice in both production and consumption areas, which often placed a great strain on the sectors that were earning less.
As a result, manual labourers and impoverished areas were the hardest hit.