Chinanews, Beijing, Dec. 14 – It's our subjective desire that the price hike in China will end as soon as possible. However, based on the current real situation and considering various domestic and international factors, we expect that the current price hike will continue for a while in future, said Cao Changqing, head of the Pricing Department under the State Development and Reform Commission (SDRC), on Thursday.

 

If we look at the type of goods that have risen in price, we will notice that the most distinctive feature of the current price hike, whether in domestic or international market, is that food prices have contributed to most of the price hike. The price of food is determined by the price of agricultural products, and agricultural production has cyclical nature because it is largely affected by natural conditions. The price rise in agricultural products demonstrates that some agricultural products are in short supply. In order to solve the problem, we need to increase production and that will require us to increase the crop-growing acreage. If the weather is good, our efforts will turn fruitful soon – maybe the food shortage problem can be solved in just one year. However, if some natural disasters occur, the problem might last for a while. The cyclical period for pig raising, for example, is normally three years. It usually takes 16-17 months for us to raise a sow, wait it to farrow and further wait for the piglet to grow into a hog. This will be a long process. So we should not expect that the undersupply of agricultural products can be solved in a short time, Cao said.

 

On the other hand, demand for food will always remain stable, despite its supply fluctuations. We always need to eat food, no matter when there is sufficient supply of it or when there is not enough food in the market. We can reduce our pork consumption for a while, but not for ever. Likewise, we will not eat more pork just because there is sufficient supply of pork in the market. Faced with a stable food demand, it might take some time before we can balance the supply and demand in foodstuffs, Cao noted.