China inflation: cost of food falls, factory-gate prices hit lowest in 6 months

China’s improving consumer and factory-gate inflation outlook continued last month, data released on Wednesday showed.

This was below the expectations of analysts in a Bloomberg survey, who had predicted a slowdown to 1 per cent growth last month.

Food prices fell by 3.8 per cent from a year earlier, down from a fall of 1.2 per cent in December, driven by a 25.6 per cent fall in the meat price and a 4.1 per cent fall in the price of fresh vegetables.

The price of pork – a staple meat on Chinese plates – plunged by 41.6 per cent compared with a year earlier in January, down from a fall of 32.7 per cent in December. It alone dragged down the consumer price index by 0.96 percentage points.

China’s core consumer inflation rate, excluding volatile food and energy prices, rose by 1.2 per cent in January compared with a year earlier, unchanged from December.

Non-food prices increased by 2 per cent last month, year on year, down from a reading of 2.1 per cent in December.