Food prices fall for 7th straight week

The prices of food and agricultural products fell for the seventh week in a row last week, despite the earthquake in Sichuan, one of the country's main agricultural bases, the Ministry of Commerce said yesterday.

Between May 19 and 25, prices fell 0.7 percent week on week, it said.

Vegetable prices dropped by 5.6 percent, as the harvest season approaches in many areas, while the price of fruit also fell due to seasonal factors, the ministry said.

The price of grain was largely unchanged from the previous week and is expected to remain stable during the summer harvest. Farmers in southern China have already begun harvesting some crops, including wheat and rape, it said.

Agriculture Minister Sun Zhengcai said earlier the outlook for agricultural products this year is good, and he expects a good harvest for a fifth consecutive year.

An official from the National Development and Reform Commission was quoted by the People's Daily yesterday as saying the earthquake would not change the trend of macroeconomic development, despite people assuming prices will rise.

"Sichuan is an important province for agricultural production and the earthquake may strengthen people's expectations of price increases, especially fresh food," the unnamed official was quoted as saying.

But the overall impact will be small, as Sichuan accounts for just 4 percent of China's GDP, he said.

Moreover, the areas that were worst-hit by the quake are mountainous, where agricultural output is small, he said.

While Sichuan accounts for about 10 percent of the country's pork production, prices fell 0.5 percent from the previous week.

They are expected to remain stable throughout the year following several price hikes last year, the commerce ministry said.

In contrast, prices of raw materials have been rising, it said.

In the first half of this month, the price of coal rose 2 percent from late April, and further rises are possible next month, as demand from industry rises, the ministry said.

The earthquake also caused major transportation problems, which will have an impact on the supply of coal, it said.

(China Daily 05/29/2008 page6)