It is unlikely that pork prices will rise when the "crazy pig cycle" reaches its peak.

On the 9th, the National Bureau of Statistics released the National Consumer Price Index (CPI) and Industrial producer Price Index (PPI) for July 2016. The data show that the CPI rose 0.2% month-on-month, 1.8% year-on-year and 1.7% lower than the same period last year. Heavy rainfall has a great impact on vegetable prices, fresh food prices fall, as the climate factors fade, vegetable prices will stabilize, the "crazy pig cycle" peaked, pork prices are unlikely to rise.

On the 9th, the National Bureau of Statistics released the National Consumer Price Index (CPI) and Industrial producer Price Index (PPI) for July 2016. Data show that CPI rose 0.2% month-on-month, 1.8% year-on-year, 0.2% month-on-month, down 1.7% from the same period last year. Consumer prices rose month-on-month, but the year-on-year increase fell slightly, while factory gate prices of industrial producers continued to narrow from decline to increase. The analysis shows that for some time to come, prices will remain stable and deflationary pressure will not be great; although the manufacturing industry has fallen somewhat, there are obvious signs of bottoming out, with a certain degree of rebound.

Heavy rainfall has a great impact on the price of vegetables, and the price of fresh food falls.

From a month-on-month point of view, CPI rose 0.2% in July. Yu Qiumei, a senior statistician from the City Department of the National Bureau of Statistics, interpreted that prices in July showed three major characteristics:

First, the climate of heavy rainfall has a great impact on the price of fresh vegetables in some areas. From a regional point of view, the prices of fresh vegetables in Anhui, Hubei, Hebei and Beijing increased by 16.2%, 14.3%, 13.3% and 12.8%, respectively.

Second, summer factors lead to seasonal increases in the prices of some services. Affected by the increase in summer trips, the prices of air tickets and travel agencies increased by 12.1% and 6.5% respectively from the previous month, affecting CPI by 0.13%.

Third, the prices of some fresh food have fallen. After rising for three months in a row, pork prices fell by 2.1%, while the prices of fresh fruits and eggs continued to decline. The influence of the three factors on CPI decreased by 0.1% compared with the previous month.

As the climatic factors fade, the price of vegetables will stabilize.

In some farmers' markets in Shandong, it is the time for vegetables to change season. coupled with the recent continuous rainfall, local vegetable production has decreased, mainly by transporting vegetables from other places, leading to a rise in prices.

In this round of vegetable price changes, leafy vegetables have increased the most. Take rape as an example. According to the average price changes of major foods in 50 cities published by the National Bureau of Statistics every 10 days, in the three periods of July, they increased by 11.4%, 5.7% and 12% respectively over the previous period, significantly higher than the price changes of meat and eggs. Vegetable operators feel most deeply about such changes. A vegetable operator in Shandong said: "the biggest price increase is for leafy vegetables and leeks, which have risen by half."

Experts pointed out that the output of vegetables in the southern region with relatively serious floods only accounts for about 20% of the country, so it is unlikely that vegetable prices will rebound, and prices will stabilize as the climatic factors fade.

The "Crazy Pig cycle" reaches its peak, and pork prices are unlikely to rise.

In addition, pig prices, which once took off this year, began to peak and fall. Take pig hind leg meat as an example. According to the average price changes of major food in 50 cities published by the National Bureau of Statistics every 10 days, in the three periods of July, they fell 1.1%, 1.1% and 0.8% respectively compared with the previous period, leading the food decline list.

In May this year, the purchase price of live pigs in Jining soared to 10.8 yuan per jin, the highest in nearly five years. Since late June, the price of live pigs has gradually dropped, from 10 yuan per jin to less than 10 yuan in early July, and then to 8.9 yuan per jin by the end of July. Many farmers wanted to make a profit under the guidance of continuous ultra-high profits to make up for the losses made in previous years, but unexpectedly, the "crazy pig cycle" was no longer popular. In just two months, a pig made 300 yuan less.

Pan Jiancheng, deputy director of the China Economic Prosperity Monitoring Center of the National Bureau of Statistics, said that the fluctuation of pork price is mainly due to the fluctuation of supply, and everyone's consumer demand for pork is relatively stable. So once the supply of pork is formed, it is unlikely to say that it is suddenly short of supply. Now that such a sign of a peak in pork prices has been formed, it is unlikely that prices will rise again if it goes on.

The decline in PPI narrowed and exports basically stabilized.

In addition, PPI, the producer price index, continues the trend of narrowing the decline. Yang Cheng, an economist, believes that both the ex-factory prices of products and the fixed prices of energy and raw materials have rebounded by a large margin. There are probably two factors in this. First, the recent booming real estate sales, real estate investment is relatively stable growth. At the same time, commodities fell sharply in the first quarter, and futures prices rebounded sharply. In such a case, non-ferrous steel, including coal prices, rebounded to a certain extent, leading to a certain degree of stability in PPI prices.

Combined with the profits of industrial enterprises and the added value of industrial enterprises, Yang Cheng believes that basically there is a gradual trend towards a conclusion, that is, although China's manufacturing industry has declined somewhat, there are obvious signs of bottoming out.

According to data released by the General Administration of Customs on the 8th, China's imports and exports totaled 2.09 trillion yuan in July, down 0.9 percent. Of this total, exports totaled 1.22 trillion yuan, up 2.9 percent; imports totaled 873 billion yuan, down 5.7 percent; and the trade surplus increased by 34 percent to 342.8 billion yuan. In this regard, Hu Min, a researcher at Chinese Academy of Governance, believes that China's exports have basically stabilized, the development trend of steady progress has been continued, and the effect of the previous policy has been shown.

The decline in private investment is the reason for the decline in prices.

Data show that CPI has fallen for three consecutive months since April. Hu Min, a researcher at Chinese Academy of Governance, said that CPI maintained a downward trend, while the decline in PPI narrowed, in line with market expectations.

Zhao Xijun, deputy dean of the School of Finance and Finance of Renmin University of China, pointed out that the decline in investment growth, especially the rapid decline in private investment, is the reason for the recent decline in prices. He predicted that prices will remain stable for some time to come.

Due to the long-term low level of CPI, the 53-month decline in PPI compared with the same period last year, as well as the downturn in foreign trade activities, some people are worried that China's economy is under deflationary pressure.

In this regard, Zhao Xijun pointed out that price trends alone cannot reflect the state of deflation, taking into account such factors as China's rising economic income and good employment performance, as long as measures such as stabilizing investment, reducing costs, and reducing excess capacity are properly implemented, deflation will not occur.