China's producer price index hits three-year high

Updated: 2008-02-18 14:48

BEIJING -- Surging crude prices pushed up China's producer price index (PPI) by 6.1 percent in January over the same month last year, the largest monthly rise in three years, the National Bureau of Statistics (NBS) said on Monday.

The index, which measures the cost of goods when they leave the factory leaped from 2.4 percent in August last year to the latest 6.1 percent in five months, indicating an accelerating price pressure.

Crude prices rose by 29.9 percent over January last year. Prices jumped 22.6 percent in November. No figure was available for December.

The costs of raw materials, fuel and power rose by 8.9 percent in January from a year earlier.

Manufacturers' prices of gasoline, diesel oil and kerosene rose 7.3 percent, 10.0 percent and 10.9 percent respectively.

The PPI for means of production was up 6.5 percent and that of domestic necessities from food to consumer durables went up 4.6 percent in general, said the report.

The price index of food, a major driving force of the CPI, ballooned by 10.4 percent, compared with the growth rate of 2.2 percent for garments and 3 percent for daily commodities. The prices of consumer durables dipped 0.6 percent, said the NBS.

Higher prices at the producer level could lead to rising consumer prices as producers might be pressured to increase prices of consumer products to offset rising costs.

Analysts believe government price control will take effect when material supply strain will be eased after the worst snow disaster in decades.

The PPI went up by 5.4 in December and 4.6 percent in November last year. The increase for 2007 was 3.1 percent, 0.1 percentage points higher than the 2006 figure, said Yao Jingyuan, the chief economist of the NBS.

Many analysts believe the Consumer Price Index (CPI) figure for January, scheduled to be released on Tuesday, could pass 7 percent.

The Bank of China forecast the CPI for January would jump 7.5 percent or higher.

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