Chinese CPI Starts Soaring As Porkflation Hits and Comparables Bite

China's headline CPI spiked to 3.8 percent in October as pork prices jumped and unfavorable year-on-year comparisons started showing up. First the food, alcohol and tobacco category spiked 2.7 percent in October and up 11.4 percent year-on-year. Pork alone spiked 20.1 percent in October from September. Even though it has been talked about and prices rose over the past year, pork prices were actually relatively stable in late summer. This latest spike is a new round of increase and it took the year-on-year increase to 101.3 percent and 29.7 percent YTD. Overall meat prices are up 66.8 percent yoy and 20.5 percent YTD.

The next two month's comparisons are against negative 0.3 percent and 0.0 percent. If food inflation ran at similar levels for the next two months,the headline CPI could be pushing 6 percent by December.

As for the PPI, it was stable with a 0.1 percent increase from September. The headline number cratered to negative 1.6 percent because of higher inflation (crude oil) from this time in 2018 dropped out of the calculation.