China's January factory prices rise for first time in a year



A textile factory in Nantong, east China's Jiangsu Province, February 9, 2021. /CFP

China's January factory gate prices rose for the first time in a year due to rising demand, data from the National Bureau of Statistics (NBS) showed Wednesday.

The producer price index (PPI), which measures goods cost at factory gate, rose by 0.3 percent from a year earlier in January, which was in line with a Bloomberg survey but slightly lagged behind Reuters' prediction of a 0.4-percent gain.

The prices of means of production rose by 0.5 percent year on year, compared with a 0.5-percent fall in December. The price of means of subsistence fell by 0.2 percent, easing 0.2 percentage points from December, according to Dong Lijuan, a senior statistician with the NBS.

The PPI for the ferrous metal smelting and rolling sector rose by 9.9 percent year on year in January. However,the PPI for the oil and natural gas extraction industry decreased by 21.9 percent year on year, Dong said.

In month-on-month terms, due to the improved domestic demand, the prices of major international commodities, such as crude oil and iron ore, continued to rise, driving the PPI to rise by 1.0 percent, Dong said.

The low temperature at the beginning of this year, coupled with the steady growth of industrial production, the demand for residential heating and industrial electricity increased significantly, driving prices in the coal mining and washing industry to rise by 6.4 percent. The heating demand also drove gas production and supply prices to rise by 3.9 percent, Dong said.

CPI declines due to high base

China's consumer price index (CPI) decreased by 0.3 percent year on yearin January due to the high base of the same period last year, data showed.

The January CPI was below the median results of a fall to zero percent by a Bloomberg survey.

This year, Spring Festival falls in February, while it was in January last year when the epidemic had not fully emerged, so the base is high, according to Dong.

The carryover impact of last year's price changes was approximately minus 1.3 percentage points, while the impact of new price increases was approximately 1.0 percentage point, Dong said.

Farmers unload vegetables at the Fengxiang Wholesale Market in Haikou, south China's Hainan Province, February 8, 2021. /CFP

Vegetable prices rose by 10.9 percent year on year in January, an increase of 4.4 percentage points. Pork prices dropped by 3.9 percent year on year in January. Meanwhile, the price of chicken dropped by 10.7 percent and duck6.8 percent.

In the non-food categories, transportation and communication price inflation dropped by 4.6 percent year on year in January. Medical and health care prices rose by 0.4 percent year on year in January, data showed.

In month-on-month terms, the CPI rose by 1.0 percent, expanding0.3 percentage points from the previous month, driven by the coming Spring Festival, the pandemic and the low temperature in some regions.