(Yicai Global) June 10 -- China's producer prices fell the most in more than four years last month as the Covid-19 pandemic continued to push commodity prices down.

The producer price index slid by 3.7 percent from a year earlier, the biggest annual decline since March 2016, according to data that the National Bureau of Statistics released today. It decreased by 0.4 percent from April, slowing its decrease from a month before that.

The PPI is expected to rebound after bottoming out as government policies are kicking in, driving domestic demand, especially in the real estate sector, according to Soochow Securities.

Meanwhile, consumer prices climbed in May due to food price hikes. The consumer price index edged up 2.4 percent from a year ago but the pace of rising was slowing down by 0.9 percentage points when compared to April 2020 and April 2019. It fell 0.8 percent from a month earlier.

Consumer prices, based on month-to-month calculations, are likely to fall this year as the Covid-19 epidemic eases, which gives more room for loosening monetary policy, according to industry insiders.

The most important factor for the month-to-month decline in the CPI was food prices that fell by 3.5 percent from April, said Dong Lijuan, senior statistician at the NBS.

Among food items, pork prices surged by 81.7 percent last month but that was a 15.2 percentage points tamer increase from a month earlier. When excluding food and energy prices, the CPI climbed only 1.1 percent from a year ago, the same rate as in April.

Pig and pork prices have slid for 15 consecutive weeks, according to data from the Ministry of Agriculture and Rural Affairs. The average wholesale price of pork has narrowed to CNY38 (USD5.40) per kilogram from mid-February's CNY50. Retail prices have dropped by nearly 25 percent.

Editor: Emmi Laine