(Bloomberg) -- Chinese Premier Li Keqiang may have known that gains in fruit prices were accelerating when he unexpectedly visited a grocery store in the east of the country last month.
He stepped into the shop while on a trip to the city of Jinan on May 25, and asked about prices and sales of fresh fruit and especially apples, according to a report by a local newspaper operated by the provincial party committee.
The premier then asked accompanying government officials to take suitable measures to ensure adequate supply and to monitor price fluctuations in daily groceries, according to the official Weibo account of the central government.
Li, an expert in economics and price controls, may have had an inkling that rising fruit prices, and food generally, would be a driver of faster inflation in May, when the consumer price index increased 2.7% from a year earlier, up from 2.5% in April, according to government data on Wednesday.
Fresh fruit prices jumped 26.7% in May, the data show, while pork, an important component in the price basket, surged 18.2% as a deadly hog virus cut output.
Rising fresh fruit prices have attracted overseas supplies, with imports of fruits, dried fruits and nuts rising to a record in April. The hype has spread to equities, with Chinese agricultural stocks climbing following the May data.
Still, Lu Ting, chief China economist at Nomura Holdings Inc. in Hong Kong, predicts the increase won’t last. “The surge of fruit and egg prices is short-lived and could subside in summer when supply increases,” although pork prices could rise further because of African swine fever, Lu said.
New research by Bloomberg Economics shows the influence of food prices on inflation in general is declining, as the nation becomes wealthier and spends a greater share of income on other things.
©2019 Bloomberg L.P.
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