Mainland's Factory Goods Prices Slump In May

The factory-gate prices on the mainland remained at four-year lows in May, official data showed on Wednesday, as the demand shock from the coronavirus continued to take a toll on the world's second-largest economy.

The producer price index (PPI), which measures the cost of goods at the factory gate, deepened its contraction last month, shrinking 3.7 percent on-year.

The figure was worse than the 3.2 percent fall expected by analysts in a Bloomberg survey, and was deeper than April's 3.1 percent contraction – underscoring the stress faced by manufacturers as China's economy churns back to life after pandemic lockdowns.

The consumer price index (CPI) rose 2.4 percent in May, just below the 2.6 percent expected and easing from 3.3 percent a month earlier, according to data from the National Bureau of Statistics.

Dong Lijuan, senior statistician at the statistics bureau, said on Wednesday the PPI drop was influenced by a fall in prices in the oil industry and other major commodities.

Another key factor behind the easing of consumer prices is the slowing food price inflation, Dong added, with more fresh produce entering the market and an increase in pork supply.

Consumer inflation had remained close to eight-year highs in the earlier part of 2020, and pork prices have been soaring after the country's herds were ravaged by African swine fever that saw millions of pigs culled.

The price of pork rose 81.7 percent on-year last month, down from a 96.9 percent rise in April and 116.4 percent spike in March. (AFP)