Egg, garlic prices surge in China

BEIJING - China has seen egg and garlic prices surge over the past two weeks despite expectations that inflation will further moderate, drawing calls for better distribution and information services to stabilize farm produce prices.

The average price of fresh eggs soared nearly 20 percent from May 21 to Tuesday, its the fastest increase recorded, according to latest statistics from a farm produce price monitoring system run by Xinhua News Agency.

In six provinces and cities including Beijing, egg prices rose by more than 30 percent in that period.

From May 21 to Monday, the country's average garlic price jumped more than 30 percent, the monitoring results show.

During that period, garlic prices advanced by more than 50 percent in six provinces and cities, with the highest growth of 86.6 percent recorded in central China's Henan province.

The rises came after China's inflation rate slowed to 3.4 percent in April from 3.6 percent in March and was widely expected to ease further in May due to falling food prices and the base effect.

The latest price moves touched the nerves of inflation-wary consumers, who worried that inflationary pressure would rebound as food prices account for nearly one-third of the basket of goods used to calculate China's consumer price index, the main gauge of inflation.

However, an official with China's top economic planner said Tuesday the price increases were "a reasonable recovery" from low bases.

Garlic prices remained within a reasonable range, while egg prices were still running low compared with the past two years' high levels, said Zhou Wangjun, deputy head of the price department of the National Development and Reform Commission.

Wholesale garlic prices stood at 5.5 yuan (87 US cents) per kg currently, up 48.6 percent from the lowest point last year but well below the highest level of about 12 yuan per kg in October 2010, Zhou elaborated.

The price rises were mainly caused by cyclical fluctuations of production and indicated there were problems with China's agriculture sector in terms of scale, organization and information services, Zhou said.

"Consumers should look at reasonable rebounds of farm produce prices in a rational way, while authorities need to beef up investment in agriculture and smooth over the cyclical fluctuations,"  Zhou said.

The price fluctuations of farm produce reflected the inefficiency of the distribution system, which increased the cost for vegetables, eggs and meat to reach customers' hands, said Cheng Guoqiang, a researcher with the Development Research Center under the State Council.

Zhang Hecheng, head of the market department with the Ministry of Agriculture, said inadequate marketing capability of Chinese farmers also contributed to rapid ups and downs in farm produce prices.

Farmers had difficulties in obtaining, understanding and using market information and tended to make unwise decisions on the production scale and price offers, Zhang said.