Oil prices rose on Tuesday in response to the news that China’s inflation was lower than expected, AP reported. It was announced earlier in the day that consumer prices rose 4.9% year-on-year in January, compared to 4.6% in December. Analysts had predicted 5.4% and the lower than expected figure seemed to ease traders’ concerns that China would need to enact even stricter measures to curb runaway price growth. In other commodities news, wheat prices fell after Chinese reassurances that its reserves are adequate to meet demand. A severe drought has crippled China’s winter wheat crop, hurting about 18 million acres. This prompted speculation that the country would become more reliant on imports, sending wheat prices to two-year highs. But a government official said reserves were plentiful following seven years of excellent harvests. Prices settled 3.6% lower on Tuesday following the announcement.
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