By Aileen Wang and Koh Gui Qing
BEIJING (Reuters) - China's consumer inflation dipped to 6.1 percent in September, retreating further from three-year highs, although stubborn food price pressures will deter the central bank from loosening its policy reins anytime soon.
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A downtrend in inflation would be welcomed by policymakers as confirmation that a flurry of increases in interest rates and bank reserve requirements is working, just when China's economy is showing increasing strains from the global downturn.
Since inflation is still close to the three-year peak of 6.5 percent hit in July, few analysts believe China will follow the likes of Brazil, Indonesia and Singapore and ease policy in the near-term, barring a marked deterioration in Europe's debt woes.
"The slowdown in the CPI last month is not drastic enough to reduce inflationary expectations, and it is still too early to confirm an easing trend in price pressures," said Qiao Yongyuan, an analyst with CEBM in Shanghai.
"The central bank is more likely to keep its current monetary stance unchanged and will wait for data in coming months to judge the direction of policy," Qiao said.
The slowdown in inflation in September was right in line with a poll of economists' forecasts and lower than August's reading of 6.3 percent.
Food price pressures remained strong, rising 13.4 percent from a year earlier, unchanged from the pace in August's data. Non-food inflation eased to 2.9 percent from 3.0 percent in August, the data showed.
China's producer price index in September came in below market expectations with a 6.5 percent rise from a year ago, compared with August's 7.3 percent.
"The data will come as a relief to the Chinese government, which now faces a deadlock in policymaking. It will fine-tune policies in December," said Shen Jianguang, an economist with Mizuho Securities Asia in Hong Kong.
China's ruling Communist Party usually holds an annual agenda-setting economic policy conference in December.
"Right now, they are not sure that inflation is slowing just (based on) one month's number. The policy will be on hold for one or two more months," said Shen.
Such doubts were underscored by the monthly price changes. The consumer price index rose 0.5 percent in September from the previous month, faster than August's 0.3 percent rise. Food prices rose 1.1 percent in the month, while non-food prices were up 0.2 percent.
The government pays particular attention to prices for pork, the staple meat for many ordinary citizens griping about inflation. Pork prices rose 43.5 percent in September from a year ago, barely down from a 45.5 percent rise in August.
Residential costs, which measure rents, mortgages and power bills, cooled to 5.1 percent, the slowest rise since October 2010.
POLICY ON HOLD
After lifting interest rates five times and banks' reserve requirements nine times since October 2010, Beijing has put policy tightening on hold as a slowdown in Europe and the United States threaten global growth.
Friday, Singapore eased its monetary policy, saying the "outlook for the global economy has deteriorated sharply." That followed rate cuts in Brazil and Indonesia in recent weeks.
Data Thursday showed China's import and export growth eased in September, with export growth hitting seven-month lows, as domestic and overseas demand cooled.
The annual pace of exports to the troubled European Union in September more than halved from August.
Some analysts say China may relax monetary policy if push comes to shove, although milder moves such as relaxing credit restrictions and lowering banks' reserve requirements are likely to come before a more drastic rate cut.
"The central bank may even see fit to ease policy before the end of the year, perhaps starting with cuts to very high reserve requirements, though it will be keen to keep a grip on lending growth," said George Worthington, the chief Asia Pacific economist for IFR Markets.
"Rate cuts are unlikely to be on the agenda barring a renewed global slump given the relatively modest tightening on that front since the last crisis in 2008/09."
(Reporting by Aileen Wang and Koh Gui Qing; Writing by Chris Buckley; Editing by Ken Wills)