The Huangpu River's most infamous occupants may be a sign of turbulent food prices

If you are new to Shanghai but want to quickly mingle with the locals, there are three popular dinner-table topics to start with: housing prices, traffic and air quality.

These days, however, another topic seems to be more popular than that trio: the more than 100,000 (and counting) pig bodies floating in the Huangpu River, the water source for many residents of China's financial hub.

Since early March, pig carcasses had been found in the river, some of them dumped by pig farmers from nearby Jiaxing city, in Zhejiang province, as indicated by the ear tags recovered from the pig' bodies.

Many have scolded Jiaxing pig farmers, and I am also angry about their irresponsible deed. But it is more important to look into the reason they disposed of dead pigs this way and what this unusual deeds can tell us.

After visiting many pig farmers in Jiaxing, I would like to say the incident is a strong sign that China's fast-moving consumer sector may experience a sharp price hike around October.

To understand this, we must first know what drives overall consumer goods prices.

The answer is nothing but food prices, which account for 30 percent of the consumer price index. In fact, food prices' correlation ratio against overall consumer goods prices stood at about 80 percent, the highest among all major consumer goods items.

Food prices also play an important role because consumer products retailers look at food prices to determine the price of their goods.

In 2012, Universal Consultancy, a consumer market researcher based in Shanghai, surveyed about 500 retailers selling 20 categories of non-agricultural consumer goods in three major Chinese cities —Shanghai, Beijing and Guangzhou.

Nearly 70 percent of them said they often adjust the prices of their goods if food prices increase sharply, even though they can get the goods at lower cost from wholesalers. This is because consumers' tolerance to price hikes is high when food becomes expensive, as many retailers put it.

Then what can gauge food prices? Of all the things that influence food prices, two effectively serve as barometers.

First and foremost is pork, which accounts for about 7 percent of the CPI basket. This brings us back to the pig story.

According to the Jiaxing government, the city raises 6 to 8 million pigs every year, supplying mostly the Yangtze River Delta, which comprises Shanghai, Zhejiang and Jiangsu. This figure makes it a big player at the local as well as the national level.

After Spring Festival, the price of pork declined continually for a few weeks, in a scenario that prompted the National Development and Reform Commission to call for precautionary measures to prevent the price dropping too much to hurt the interest of pig farmers.

Jiaxing's pig keepers were hit hard by this round of price declines. Many of them told me that the more pigs they raise, the bigger the loss they had to endure.

The dire situation has prompted them to save every penny they can. That is why this year saw a sharply increasing number of them dump pig carcasses into the river instead of sending the bodies to designated treatment centers —the latter costs much more than simply throwing bodies away. (Of course, I'm not defending what they have done. After all, as I live in Shanghai, I don't want my tap water to come from dead-pig soup.)

In addition, Jiaxing's case is hardly isolated. What is worse is that many of the city's 130,000 households that raise pigs began to slaughter sows and piglets.