BEIJING (AFP) — China's producer or wholesale prices rose in January at the fastest rate in over three years, the government said Monday, suggesting taming inflation remained a challenge.
The producer price index gained 6.1 percent last month from a year earlier, the National Bureau of Statistics said. It compared with an increase of 5.4 percent in December and a rise of 3.1 percent for all of 2007.
"(It) reflects a broad-based uptick in a range of commodity and raw material costs, highlighting upward pipeline inflationary pressure in China," said JP Morgan in a research note.
JP Morgan added the January figure was the highest year-on-year monthly rise since December 2004.
Producer prices are often seen as harbingers of future trends in consumer prices, which more directly affect China's 1.3 billion consumers.
Prices of crude oil rose 29.9 percent in January, while the prices of steel products were up by as much as 28.6 percent, according to the statistics bureau.
The release of the January producer prices came one day before China was scheduled to release the benchmark consumer price index, or CPI, for January.
JP Morgan pointed out that producer prices for food picked up in January, rising 10.4 percent in January after easing modestly to 8.8 percent in December.
"This likely confirms a rebound in food component in the CPI data," the investment bank said. Food items account for roughly one third of China's consumer price index.
China's consumer prices are hovering at 11-year highs, hitting 6.5 percent in December following a 6.9-percent spike in November.
Some observers expect consumer prices to have topped seven percent in January, the state-controlled China Industrial Economy News reported on its website.
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