Inflation within control as harvest eases pressure

Fields of ripe rice are seen at Xinjing Town in Jingxi County, south China's Guangxi Zhuang Autonomous Region, Oct. 3, 2013. (Xinhua/Wei Wanzhong)

China's 3.5-percent target for controlling inflation this year is achievable as a steady increase in grain output has helped ease pressure, said Monday's overseas edition of the People's Daily.

China has recorded another bumper grain harvest in 2013 as output gained 2.1 percent year on year to hit 601.94 million tonnes, marking the 10th consecutive year of growth, earlier official data showed.

The rising supply is "of great significance" for China to guide market expectations and stabilize overall prices as food has a weighting of roughly one-third in calculating China's consumer price index (CPI). the paper said.

"Any rises in food prices would affect expectations, which may prompt the panic buying that can lead to a new round of price rises," Zhang Zhenghe, a professor at the China Agricultural University, told the People's Daily.

China's CPI grew 3.2 percent year on year in October, up from 3.1 percent in September. In the first 10 months of 2013, CPI growth stood at 2.6 percent on average.

Given the bumper harvest and other factors including the government's prudent monetary policies, China's CPI is likely to grow 2.7 percent this year, well below the government control task of 3.5 percent, said Lian Ping, chief economist at the Bank of Communications.

Also on Monday, the China Securities Journal carried a report from the price monitoring center of the National Development and Reform Commission saying despite the bumper harvest, China will see faster growth of food prices next year.

The report named rising production and labor costs, and increasing minimum purchase prices as major factors driving growth.

"Growth in food prices may push up the overall price levels by an average of 0.2 percentage points to 0.5 percentage points next year," the report concluded.