MercoPress. South Atlantic News Agency

October food prices in China soar 17.6% in twelve months

China's Consumer Price Index, a barometer of inflation reaches 6.5%

China's consumer prices rose sharply in October reaching a decade-high monthly inflation rate of 6.5% adding to pressure for measures to cool the politically sensitive continuous surge in food prices.

Food prices jumped 17.6% in October over the same month last year, while the price of pork, China's staple meat, soared 54.9% according to the National Bureau of Statistics. The overall October inflation rate was higher than the 6.2% reported in September and matched August 6.5%, the highest rate in 11 years. Inflation has surged in recent months due to double-digit increases in food prices blamed on shortages of pork and other basic goods. The food price spike is especially sensitive for the Beijing regime since China's poor majority spends as much as one-third of its income on food. A deputy central bank governor said last month the government expects inflation for the full year to be 4.5%, overshooting the official target of 3 percent. Inflation for nonfood items in October was just 1.1%, the statistics bureau said. Beijing froze prices of cooking oil and other basics in September, and is pressing farmers to raise more pigs, promising free vaccinations and other aid. Economists say price pressure should ease when a new grain crop is harvested and more pigs come to market. Farmers had been reluctant to raise more pigs in part because of an outbreak of blue ear disease, which killed 70,000 animals and prompted the government to destroy thousands more. The government declared last week it had brought the outbreak under control. An official of China's top planning agency, the cabinet's National Development and Reform Commission, said in October that the government would consider investment curbs and other unspecified "measures to adjust prices". Regulators raised state-set prices for diesel and gasoline by 10% on November first in an effort to curb demand amid a fuel shortage but the government said that should add only 0.05% point to the monthly inflation rate. The government has raised interest rates repeatedly this year to curb a boom in construction and investment that regulators worry could lead to financial problems. Economists say the recent inflation spike is due to food shortages and has nothing to do with those concerns.