China's producer price index (PPI) for industrial products rose eight percent in March year-on-year, while the factory-gate prices of raw materials, fuel and power were up 11 percent.

According to the National Bureau of Statistics (NBS) on Friday, the rise in the PPI, which measures the value of finished products when they leave the factory, was only 2.4 percent as recently as August, indicating intensifying price pressure.

Factory-gate prices of crude oil surged 37.9 percent year-on-year, while those of gasoline, diesel and kerosene were up 9.9 percent, 10.9 percent and 12.1 percent, respectively. The producer prices of raw coal jumped 27.4 percent and those of steel products rose between 22.2 percent and 35.5 percent. The purchasing prices, or costs of raw materials, fuel and power, rose 19 percent, 18 percent and 9 percent, respectively, from a year earlier. The PPI for manufactured goods was up 6.9 percent in the first quarter, while the costs of raw materials, fuel and power rose by 9.8 percent year-on-year.

The price index of food, a major component of the consumer price index (CPI), ballooned by 12.3 percent, compared with the growth rates of 2 percent for garments and 3.8 percent for daily commodities. The prices of consumer durables were up 0.6 percent, said the NBS.

Li Xiaochao, spokesperson of the NBS, said higher ex-factory prices could lead to a rising CPI, as producers might seek to pass on their own rising costs to consumers.

He said the bureau would closely monitor the impact of rising production costs on inflation in coming months.

China's CPI, a key measure of inflation, was up 8.3 percent in March, following an 8.7 percent rise in the previous month, according to the NBS.

Food prices, which account for one-third of the CPI basket, soared 21 percent year-on-year in the first quarter.

China has set an annual CPI target of 4.8 percent this year.

(Xinhua News Agency April 18, 2008)