In the year of the golden pig, pork is gold, indeed.

Causing concern for the policymakers, rising pork - and egg - prices are mounting pressure on the consumer price index (CPI).

According to the Ministry of Commerce, wholesale prices of pork in 36 major cities in early May were 43.1 percent higher than last year while retail pork prices were up by 29.3 percent. Egg prices rose 31.6 percent in early May year-on-year.

In Beijing, pork prices recently rose more than 30 percent in just a few weeks. Wholesale prices in Shanghai hit a decade's record of 16 yuan per kilogram in April, up 20 percent from a month ago.

"The price rises will spill over to food and other products and have a major impact on the recent trend of the consumer price index," said Hu Shaowei, an economist with the State Information Center.

Hu attributed the price rises to a supply shortage. Pork supply is cyclical, he told China Daily.

Du Xiaoshan, a researcher with the Chinese Academy of Social Sciences, has a slightly different take. Prices of pig feed have been on the rise this year, driving up pork prices, said Du.

The rising feed cost and low pork prices in the past few years have dampened farmers' interest in raising pigs. The resulting supply crunch has been accentuated by the outbreak of the blue ear disease, leading to many pig deaths, said Beijing-based Galaxy Securities in a public note.

The recent strong growth momentum of pork and egg prices, coupled with the continuous rises in prices of grain and agricultural products, have led to concern that the CPI may break the 3 percent benchmark set by the central bank for this month and the next.

Goldman Sachs Asia said the CPI may be pushed to 4 percent in the coming months and has adjusted its CPI forecast from 2.6 percent to 3.6 percent for the year.

But Zhao Xiao, an economist with the University of Science and Technology Beijing, believes the impact of rising grain and agricultural product prices on CPI, although significant, will only be short-term. As the summer grain starts hitting the market, prices will be stabilized, he believes.

As for pork and egg, the high prices in recent months will drive up pig raising and supply, hopefully stabilizing prices from July, Hu and Zhao concur.

Source: China Daily