SHANGHAI'S producer prices started to rebound last month, indicating rising costs at the factory gate and posting a bigger challenge for the local government to tame inflation.
Producer Price Index in Shanghai expanded 1.2 percent from a year earlier in October, the Shanghai Statistics Bureau said today.
The pace picked up quickly from the gain of 0.3 percent in September and 0.7 percent in August. It was the first acceleration in the pace of the rate since May.
"Rising costs of crude oil, metal and chemical substances fueled the producer price increase," said Wang Zehua, an analyst at the bureau. "The price may continue to expand if the upward costs can't be controlled."
Shanghai's Consumer Price Index, the main gauge of inflation, jumped to a yearly record of 4.1 percent in October.
A rebound in producer prices indicated more expensive products will get on shelves soon and push consumer prices even higher in the following months.
Shanghai government has announced a batch of new measures to contain inflation and cool inflationary expectation.
The government said last Thursday that it will strengthen supervision over price increase, raise market supply of daily goods including rice, oil and meat, provide subsidies for low-income families and streamline circulation process to reduce costs.