MNI REALITY CHECK: Cheaper Pork To Push China's Apr CPI Lower

By Wanxia Lin

     BEIJING (MNI) - China's consumer price inflation rate is likely to slow

further in April as supply constraints on some foodstuffs eased and demand for

transportation and services remained depressed, despite a gradual reopening of

the economy, industry insiders told MNI.

     Key points from their comments ahead of the May 12 data release:

     **Pork prices fell for eight consecutive weeks by end-April on excess

supply

     **Vegetable and fruit prices fell slightly from March

     **Fuel prices remained low on slow recovery of demand

     LI BING, ANALYST WITH BEIJING-BASED COMMODITIES CONSULTANCY BAICHUAN

INFORMATION: "Pork prices, the main inflation driver over the past year, fell to

CNY41.33 per kilo by the end of the month from CNY44.5 per kilo in early April

after the central government released 80,000 tonnes of frozen meat from the

national reserves."

     This saw pork prices in large-scale supermarkets nationwide monitored by

Baichuan decline 7% m/m from March, although they were still 106% higher than a

year earlier, she said.

     "The current excess supply may continue to weigh on price before a wider

opening of restaurants and schools."

     LI QIANG, CHIEF ANALYST AT SHANGHAI JC INTELLIGENCE CO:

     "The increased release of pork reserves and imports of pork have pushed up

supply ... And around 15-20 million pigs which had been kept for breeding

flooded into the slaughter market between March to May, which is a huge amount."

     "Though pork prices fell for eight consecutive weeks by the end of April,

the downward trend may not continue," he said, noting that the supply would dip

in the short-term given that pork imports from the U.S. were interrupted in

early April due to the pandemic.

     OWNER OF TAIXIAN, A FRUIT AND VEGETABLE WHOLESALER:

     "The price of vegetables and fruits in April was lower than in March as the

epidemic eased ... The market is expected to return to normal in May."

     DU JUAN, SENIOR ANALYST AT YIMUTIAN, A B2B WEBSITE MATCHING FARMERS WITH

BUYERS:

     "The wholesale prices of vegetables and fruits monitored by Yimutian fell

1% and 6% from the previous month as transportation eased, but on a yearly

basis, vegetable prices rose 15% while fruit prices fell 15% from a year

earlier."

     "Normally around this time, the price of vegetables would see a large

decline as the weather warms up, but the decline in April this year was not

significant, indicating that the epidemic was still weighing on the market."

     SANG XIAO, ANALYST AT ZHONGYU INFORMATION, COMMODITIES ADVISORY BASED IN

SHANDONG PROVINCE:

     "Though the government stopped lowering the retail prices of domestic

gasoline and diesel in April after global oil prices slumped, pushing China's

floor price to $40 a barrel, wholesale fuel prices declined on the slow pick up

in demand."

     The average monthly wholesale PetroChina and Sinopec gasoline price in 30

major provinces fell by CNY491 to CNY 5,541 per tonne from March, while that of

diesel decreased by CNY325 to CNY 5,487.

     --April CPI data will be published Tuesday May 12, with expectations for

the annual rate to dip to 3.7% from 4.4% in March. The annualised rate peaked at

5.4% in January.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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