Factory gate prices in China increased at their quickest rate in 26 years in October, as major power shortages and record commodity prices affect the world’s second-biggest economy, the Financial Times. China’s official producer price index increased 13.5% year-on-year, according to figures released by the National Bureau of Statistics on Wednesday, its biggest monthly jump since 1995.
The gain exceeded the 12.4% rise forecast by analysts polled by Reuters, and outpaced September’s 10.7% reading, which was also the highest since 1995. Factory gate prices refer to the cost at which wholesalers buy materials from producers, not taking into account transport and distribution fees.
Rising commodity prices have also compounded the country’s energy woes. China is battling soaring coal prices after flooding in critical mining regions and the government’s clean energy goals reduced output, while widespread power rationing led to a second monthly contraction in manufacturing activity in October.