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China's inflation eases from a three-year-high but the central bank policy is not easing up. Analysts warns food prices, especially the price of pork will still remain volatile.

China's inflation dropped to 6.2 percent in August. Back in July it was at a three year high of 6.5 percent.

But Chinese consumers still face high food prices—the price of pork remaining high and unstable.

Chinese official data, released on Friday, indicated expectations that price pressures have reached its record high—that the central bank can put off further tightening of monetary policy in the face of a global economic slowdown.

But the central bank is not easing up... food prices rise by 13.4 percent in August from last year. Customers feel the pinch in their wallets, as the price of pork remains high.

[Customer]:
"The current pork price is too expensive for me to buy it every day. I can only afford to buy pork once or twice a week. The price changes everyday. It is insanely high now."

Analysts say the soaring price of pork will put pressure on other food prices.

[Xianfang Ren, Economic Analyst, Global Insight]:
"The price of pork is a very important element in China's inflation, because whenever there is high inflation, pork prices will become volatile. Pork prices have not yet been stabilized and they are now beginning to affect other food products, like eggs, because they are also high in protein."

Analysts say price pressures expect to ease by the end of 2011, as economic growth slows. But it's not happening quick enough.

The People's Bank of China has increased interest rates five times—banks' reserve requirement ratios have gone up nine times since last October.

The increases have burdened many smaller and medium-sized companies with higher costs and lower profit margins.