China's consumer prices estimated to have risen over 6 pct

By Kim Young-gyo
HONG KONG, July 5 (Yonhap) -- China's consumer prices are estimated to have grown more than 6 percent in June, the highest level in 35 months, due largely to soaring food prices, experts said Tuesday.
In May, China's consumer prices rose 5.5 percent from a year earlier, recording a 34-month high. It was the third straight month that the increase has been over 5 percent.
Major investment firm China International Capital Corp. (CICC) said China's consumer price index (CPI) had probably grown 6.2 percent last month, fueled by pork prices that surpassed the historical high in 2008.
Pork is the most widely consumed and affordable meat in China. Pork prices account for a large proportion of China's food prices, which take up to 30 percent of the CPI. The price of pork surged to nearly 28 yuan (US$4.33) per kilogram last month, compared to the 2008 peak of 26 yuan.
Shenzhen-based Anxin Securities Co. put the estimate in the range of 6.2-6.3 percent.
"The CPI is likely to have peaked in June and will set into a downward trend, starting from July," said Gao Shanwen, an analyst at Anxin Securities.
China Galaxy Securities Co. in Beijing predicted a higher level for the CPI at 6.3-6.5 percent.
"Apart from pork prices, rising commercial property rental fees and power price increases will add to inflationary pressure," said Fan Xiangdong, chief economist at China Galaxy Securities.
China started to raise prices of electricity last month as part of its efforts to better reflect market demand and save energy as it has been facing a serious power shortage.
In a move to curb runway inflation, the People's Bank of China, the central bank, raised the benchmark interest rate in April for the second time this year in a bid to curb rising prices. It has also hiked the deposit reserve requirement ratio for its major banks six times so far in 2011.
ygkim@yna.co.kr