China’s factory-gate prices rise in June

BEIJING: China’s factory price inflation rose in June, the government said yesterday, as a trade war threatens producers in both of the world’s top two economies.

The producer price index (PPI) rose 4.7 per cent year-on-year, according to the National Bureau of Statistics (NBS), a notch above the 4.5-per cent gain forecast in a Bloomberg News survey.

The consumer price index (CPI), a key measure of retail inflation, rose 1.9 per cent last month on-year, up from 1.8 per cent in May and in line with Bloomberg’s forecast.

There are fears that the trade war with the US could stoke inflation, with tariffs making imported goods more expensive in China.

American soybeans are used for cooking oil and animal feed in China, and soybean traders say that in the fourth quarter, when soybean production tails off in Brazil – the only other major exporter – China may have no choice but to import more costly US soybeans.

Beijing late Monday encouraged companies to diversify away from the US.

Companies should “adjust their import structure, increase the import of soybeans, soybean meal and other agricultural products, as well as aquatic products and automobiles from other countries and regions,” the commerce ministry said in a statement. — AFP