Special Report-Vegetable Prices Soar, Chinese Government Targets Hoarders

Vegetable prices have soared in China in recent weeks, passing meat prices in some cases. It caused a new problem for consumers already impacted by energy shortage and COVID restrictions. Chinese Ministry of Commerce data shows vegetable prices have increased by 28% over the past four weeks and at its highest level since February. Floods and high coal prices affected vegetable prices.

Hoping to ease the price pressure, the Ministry of Agriculture pledged to crackdown vegetable hoarding to ensure supply security. Economists expect the inflation to be temporary until the demand becomes lower in the Lunar New Year in February.

Despite surging vegetable prices, among other products, thanks to falling pork prices and weak household demand, consumer inflation has eased this year. The vegetable price surge will not have a large impact on inflation as the product’s weight in CPI is low.

However, if the prices keep rising and consumers switch to eating more pork and eggs, it could impact inflation rate more seriously. The government keeps watching pork prices because it’s an important determinant in CPI. There already seems a spillover as both egg and pork future prices have increased.

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