The Hong Kong consumer price index (CPI) in June was 1.3 percent higher than in the same period last year, indicating moderate inflation in the city triggered by growing food prices.

The SAR Census and Statistics Department (CSD) also said the composite CPI for June increased 1.2 percent compared with May.

"The slight creep up was mainly due to hikes in pork prices as a result of a supply shortage," said a government spokesman.

In addition to food, year-on-year increases in June were also recorded for clothing and footwear, meals bought away from home and miscellaneous services.

Prices for durable goods, alcoholic drinks, tobacco, electricity, gas and water declined year-on-year in June, the CSD said.

Food prices showed the largest increase, some 4.5 percent, among all consumer prices, followed by clothing and footwear, which rose 4 percent and meals bought away from home, which registered a 2 percent jump in prices.

Durable goods showed a 4.5 percent year-on-year price decrease, while alcohol and tobacco were 2.4 percent lower.

Rapid growth in labor productivity should provide some cushion against overall inflationary pressures, the spokesman added.

Analysts say the CPI increase originated from the mainland, the prime source of many consumer goods in Hong Kong.

Over 90 percent of the pork supply in Hong Kong comes from the mainland, where the wholesale price of pork has increased dramatically.

The rise in the price of pork and eggs led mainland consumer price increases, which as a whole jumped 4.4 percent in June.

Pork prices on the mainland increased almost 75 percent in June compared to the same period last year, largely due to higher feed costs and an outbreak of a deadly swine ailment called blue-ear disease.

(China Daily 07/26/2007 page15)