Consumer prices in Guangdong, which have been rising for four consecutive months, had a respite in October, but that does not constitute a sign of a downward trend.

Guangdong Statistics Bureau just released the latest consumer prices index (CPI) for October, during which time the index slipped 0.1 per cent from September. But it still amounted to a year-on-year increase of 3.6 per cent.

The overall price surge was held in check mainly by grain and fresh produce, that were seasonal and in abundant supply.

Compared with September, grain fell 0.3 per cent and cooking oil 0.1 per cent. Oversupply of fresh vegetables pushed down prices by 10.2 per cent. Cool weather stimulated egg production, which nudged down prices by 2.5 per cent. Fresh fruits dipped 1.2 per cent.

This was the first time since July when CPI reversed its direction and went south a little bit.

Paces of price movement varied from city to city in the Pearl River Delta. Dongguan saw the biggest overall drop of 1.1 per cent; Foshan 0.7 per cent; Zhaoqing 0.6 per cent; Shaoguan and Huizhou 0.4 per cent and Zhuhai 0.2 per cent.

Guangzhou went against the tide. The Canton Fair pushed up prices, mostly of hotel rooms and travel services, by 0.6 per cent.

Food prices had been rising since October 2003, contributing to the 13-month steady climb of the CPI. It was only punctuated, in a very limited scale, in February, May and July. Price increases in July, August and September were dangerously close to the 4-per-cent mark of red alert.

September figures were affected by the opening of the fall semester when students had to pay higher prices for textbooks. New editions of textbooks are thicker and use paper of better grades. As a result, textbooks rose 4.5 per cent and reference books 5.2 per cent.

Prices for gas and diesel shot up in October as crude oil touched the US$55 benchmark on the international market. Rumours spread. The price agency had to issue a special edict and conduct month-long inspections to fight price manipulation and hoarding.

Even though the new CPI figure offers some room for breathing for ordinary consumers, government officials warn that one should not read too much into it and it is too early for optimism. It means, they analyze, the rate of price ascent is slowing, but not the ceasing of the trend.

Experts say that prices for poultry and bottled gas are still on high levels. The drought in rural Guangdong is exacerbating the problem, and will bring grain and produce prices back up. Come winter, demand for bottled gas will build up, further boosting its price.

Officials at the statistics bureau predict that overall CPI for the whole year will hopefully be kept under 4 per cent.

As for fluctuations in 2005, they say it's unlikely that prices will come down significantly. Instead, they may maintain their high levels or even move up a notch or two.

Editor: Olivia