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By Tu Lei (chinadaily.com.cn)
Updated: 2007-07-09 15:21

The consumer price index (CPI) is expected to rise 3 percent in the first half of this year, and to exceed 3 percent all year round, said a pricing official with the National Development and Reform Commission, China's top economic planning body, People Daily reported today.

The bio energies have been popular due to the price hike of crude oil, which has led to price increases in the international grain market, and pushed up the price of domestic grains. It contributed to price hikes in meat, eggs and cooking oil, said the official.

The prices of most agricultural products including grain, wheat, corn and pig are lower than that of 10 years ago, while the feeding costs including the labor price keep increasing, which causes the price hike of agricultural products, he added.

Meanwhile, the short supply of live pigs has increased pork prices, leading to a higher CPI, said the official.

In the first half of last year, the pork prices dropped rapidly, and the rising feedstuff prices and the blue ear disease which killed a large number of pigs nationwide dampened enthusiasm for raising pigs.

The latest round of price increases began late last year, and eight to nine months would be enough for new supply to meet market demand, added the official.

For the January-May period, China's CPI increased 2.9 percent. In May alone, the CPI reached a two-year high of 3.4 percent after rising 3.1 percent in March and 3.0 percent in April.