Society
Sticker shock jolts buyers to stores amid inflation worries
By Wang Jingqiong (China Daily)
Updated: 2009-12-08 08:03
The stockpiling at the grocery store has begun.
Shoppers nationwide went scurrying to the supermarket to buy more cooking oil over the past few days before prices shoot up more than 15 percent.
On Sunday, prices of cooking oil, including main brands like Jinlongyu and Luhua, all went up 6 percent to 15 percent in most stores last week, according to Xinhua's price monitoring system. Even bigger increases are expected soon.
In mega-supermarkets such as Wal-Mart and Lotus Land, customers were buying several barrels of cooking oil, store managers said. A majority of shoppers said it was better to stock up on oil than "to wait till the price is really high."
"Everything is becoming more expensive. You get far less stuff in a basket spending the same money nowadays", said Wu Weiming, a customer in a supermarket in Nanjing.
Experts anticipate the rising price of Moutai will have a domino effect on other well-known brands of liquor.
Statistics by the China Price Information Network show that in the past month, the price of vegetables has continued to rise and the price of pork has steadily gone up.
Zhao Zhiwei, deputy director of Shanghai Cereals & Oils Management Association, said the price hike for cooking oil is not surprising.
"It's decided by its selling cycle and because the international oil price is going up," Zhao said.
"The drought in Northeast China is also causing a drop in output from beans that are made into oil," Zhao added.
According to Xinfadi market, the biggest vegetable and meat market in Beijing, prices for 42 vegetables went up last month, with some shooting up by as much as 30-50 percent. The wholesale price of pork increased by 8.15 percent, from 6.75 yuan ($0.99) per 500g to 7.3 yuan per half kg.
"The price of vegetables still shows a tendency of further rising now", said Liu Tong, a statistician at the market.
Liu said that rice and flour also went up after November, from 2-11 percent.
But experts said current economic figures do not support the allegation that inflation is inevitable.
"The public should not be too sensitive to reasonable price changes. Inflation will not occur in China in the short term," said Li Yang, an economist and vice president of Chinese Academy of Social Sciences.
Zhao Xijun, professor of finance at Renmin University of China, said the expectation of inflation is not inflation at the moment.
"I believe the central government policies will be adjusted in time according to new CPI figures," he said.
Zhao said although the central bank is still adopting proactive fiscal policies and moderately easy monetary policies, loans from banks are being more tightly regulated, which began in July.
Lu Lei, president of the Guangdong University of Finance, said that fluidity will be slightly tightened next year, which is a key factor influencing inflation expectation.
This is mainly because China's trade surplus will continue to drop in 2010, resulting in a decrease in the funds outstanding for foreign exchange and slower credit issuance, which will tighten fluidity and reduce inflation expectations, he said.
