The prices of production materials in China rose 0.5 percent last week from a week earlier, the Ministry of Commerce (MOC) said Tuesday.

This could drive up producer inflation and then fan consumer prices that had eased significantly in May as businesses passed the higher costs on to customers, analysts said.

A survey of 36 medium and large cities between June 16 and 22 showed that of 112 products, 37 saw price increases, 18 declined and 57 were unchanged.

The MOC said prices of energy, minerals, rubber, non-ferrous metals, construction and farm production materials rose; prices of chemicals were unchanged; ferrous metal prices dropped.

Prices of farm produce slid 0.1 percent, on top of a 0.6 percent decline a week earlier, according to the survey.

Of the 58 products surveyed, 24 saw price falls, 25 experienced gains and nine were unchanged.

Prices of vegetables slumped 1.6 percent as supply increased in summer.

Grain prices were unchanged. Wholesale prices of pork, the staple meat in China, edged down 0.1 percent. Prices of mutton and beef climbed 0.3 percent and 0.2 percent respectively.

The producer price index (PPI) rose 8.2 percent in May, up from 8.1 percent in April. The consumer price index (CPI) jumped 7.7 percent in May, down from 8.5 percent in April.

The rate of increase in food prices, a major driver behind China's high inflation, dropped 2.2 percentage points to 19.9 percent in May from a month ago.

(Xinhua News Agency June 25, 2008)