China's consumer prices hit a six-month high as Covid prompts locals to stock up on food

cnbc.com:

BEIJING — China's consumer and producer prices rose more than expected in April, according to data from the National Bureau of Statistics released Wednesday.

The consumer price index rose by 2.1% last month from a year ago, boosted by a surge in energy and fresh vegetable costs. The reading topped expectations for a 1.8% rise forecast by a Reuters poll.

April's figure was also the highest since November's 2.3% print and well above the 18-month average of 0.9% consumer price inflation. China's official CPI target for 2022 is «around 3%.»

«The main driver was a pick up of food prices due to rising transportation costs and restocking demand from tighter Covid restrictions,» Goldman Sachs analysts said in a report Wednesday.

«In year-over-year terms, we expect CPI inflation to rise and PPI inflation to fall on base effects,» the report said. «Sequentially CPI inflation may moderate in the near term as the inflationary pressures from food prices might ease with the improved Covid situation in China.»

Since March, mainland China has tightened travel restrictions and imposed stay-home orders in many parts of cities to contain the country's worst Covid outbreak since early 2020. The controls have prevented many factories from producing at full capacity or moving goods between suppliers and customers.

Fresh vegetable prices rose by 24% year-on-year in April, while fresh fruit prices increased by 14.1% during that time. Pork prices, a major contributor to China's CPI, posted a relatively rare 1.5% increase from the prior month for a more moderate year-on-year drop of 33.3%.

Fuel prices for transportation climbed by 28.4% from a year earlier, reflecting recent surges in oil and commodities prices.

However, China's rising consumer