The State Council suppressed the price of vegetables from the source to curb inflation

The security of grain production and the stability of agricultural product prices are the major events that are “safeguarding the world and stabilizing the people.” Following the policy measures taken by the State Council Standing Conference on the 11th to support the deployment of late rice and autumn grain production, the State Council’s executive meeting held yesterday introduced six measures. Promoting vegetable production and ensuring market supply and prices are basically stable. The State Council's executive meeting has issued two agricultural policies within one month. This fully demonstrates the firm determination of decision makers to support agricultural production and stabilize the prices of agricultural products.

Premier Wen Jiabao of the State Council presided over the executive meeting of the State Council yesterday to study and deploy the six policy measures to further promote vegetable production and ensure market supply and price stability. Analysts pointed out that this shows that outstanding factors in the current price increase pressure are causing high-level attention.

The executive meeting of the State Council proposed to establish a vegetable reserve system and implement a minimum amount system for vegetable plots. Experts pointed out that this move will help stabilize the impact of fresh food price fluctuations on CPI and curb inflation from the source. Data show that in July The overall level of consumer prices rose by 3.3% year-on-year, and rose by 0.4% month-on-month, reaching the year's high. From the perspective of the specific composition, among them, meat and poultry and their products (mainly pork), rising prices of fresh vegetables affect the overall level of consumer prices, respectively. Increased by 0.3 and 0.1 percentage points from the previous quarter.

Although the slight increase in CPI in July was mainly caused by short-term factors, the rate of change did not exceed the social expectation, but the two short-term factors of pork price and fresh vegetable price are likely to continue to promote CPI in the third quarter.

At present, although the price of pork has apparently increased, its price level is still relatively modest relative to historical levels, and the profitability of hog farmers is still low. Therefore, the government may not be able to start the regulation of pork prices soon. To the next two months is the peak season of pork consumption, pork prices still have room for further growth.

The price of vegetables is excessively affected by weather and other natural disasters. It is still difficult to predict. In the past month, due to serious floods and other factors in many provinces and regions, the prices of vegetables have stopped falling, and the price of fresh vegetables has increased by 4.3% month-on-month. Compared with the middle of June, the average wholesale price of garlic in large and medium-sized cities from August 2 to August 8 rose by as much as 46.4%.

The autumn grain harvest has a major impact on the future inflation situation. Although the NDRC stressed that in recent years, China’s grain harvest year after year, stocks are abundant, and the ratio of inventory to consumption exceeds 40%, which greatly exceeds the internationally recognized level of safety line of 17-18%. Therefore, China has The ability to keep food prices stable, a slight increase. But for the current forecast for the domestic output reduction of autumn grain, coupled with international market factors, the current market is expected to further increase food prices are spreading.

According to preliminary statistics, the country’s autumn grain planting area has increased by more than 4 million mu over the previous year, but due to the impact of widespread low temperatures at the beginning of the year, delayed harvesting of summer grain and early rice, etc., autumn grain sowing in general has been postponed, and the climate conditions in the second half of the year are still uncertain. Replanting relatively early-maturing varieties with relatively low yields may result in a decline in yield and quality, and there is considerable uncertainty in the production of autumn grain, which accounts for about two-thirds of the annual grain output. If the autumn grain is cut sharply, then the CPI will be under heavy pressure.

However, there are also some favorable factors in the future. First, under the previous government’s efforts to strengthen the regulation of the real estate market and increase energy conservation and emission reduction efforts, the current price of production materials will continue to decline in an overall manner. The pressure of PPI transmission to CPI will be Significantly reduce. Second, taking into account the factors of the same period last year, the carryover factor will weaken in the coming months, which will help CPI gains remain mild fluctuations at the current level.