Experts predict July CPI rally may reach year highs

The price of agricultural products has continued to rise recently, affected by torrential rains and floods. Some researchers have predicted that the July consumer price index (CPI) may have risen 3.5% per cent year-on-year, reaching a high for the year.　　According to the Ministry of Commerce monitoring, four weeks from July 5 to August 1, the price of edible agricultural products continued to rise in the week, the increase was 0.5%, 1%, 0.7% and 0.3%. Sun, China's chief economist for Nomura Securities, said the ministry's data showed that prices of edible agricultural products rose by 1.6% in the three-week period before July, while the price of edible agricultural products fell by 1.6% in June. The July CPI could jump from 2.9% in June to 3.5%, he predicts. He also believes that food prices have soared because of heavy rainstorms in many provinces in July, and prices may fall in September or October after the end of the rainstorm season.　　To reduce the real negative interest rate in China, he said, it would still have to raise interest rates by at least two times in the second half of this year at 27 basis points, according to CPI inflation levels. While China International Finance Limited believes that, despite the recent floods and other disasters, short-term agricultural prices are facing upward pressure, but does not constitute a basis for sustained inflation. CICC expects CPI growth to rise to 3.4% per cent year-on-year in July, and the July PPI may continue to fall to 5.2%, affected by falling international commodity prices. According to Sina Finance