The Big Call

Food inflation to surge

  • Published 14 Jan 2010

No economic trend in China is more important than inflation, as we have been saying since July last year (CC July 9th Big Call). If Beijing fails to control it, it may have to slam on the monetary brakes later this year, potentially precipitating a 'hard landing' for the economy.

Food accounts for the largest single weighting – around 30% – in the Consumer Price Index (CPI), the key indicator of inflation. Thus, the outlook for food prices is important not only for food companies (see Consumer China) and the broader rural economy but also for the direction of economic policy. Our researchers in different cities have delved into grassroots conditions to gauge the inflationary environment that surrounds key food products. Our Big Call this issue is:

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