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By Song Hongmei (chinadaily.com.cn)
Updated: 2007-07-10 13:24

Related readings:  M2 growth underestimates inflation pressure  PBOC: Financial stability enhanced Pork price rise alone won't affect CPI much: Economists  Report: Liquidity high but manageable

The growth of the biofuel industry in developed countries has pushed up demand for corn and soy, resulting in sharp rises in grain prices in the international market. These price rises have, in turn, spilled over into the domestic market, affecting the costs of eggs, meat, poultry, milk and cooking oil, the official added.

Rising costs in the animal husbandry sector is another factor behind the grain price rises, he explained. Pork prices, which are estimated to account for 7 percent of the CPI basket, surged in the first half due to tight supply, due to blue ear disease causing a mass culling of pigs, the official said.

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