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NZ food prices weaken in May, avocados smash records

Wednesday 13th June 2018

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New Zealand food prices slipped in May as record high prices for avocados and increased meat prices were offset by weaker prices for mandarins, kiwifruit and tomatoes.

Statistics NZ said food prices fell a seasonally adjusted 0.1 percent in May from April as rises in meat, poultry and fish prices were offset by falls in fruit and vegetable prices - except for avocados which hit a record average price for a 200-gram avocado of $5.05, up 37 percent from April and 50 percent higher than May last year.

Overall, fruit and vegetable prices declined 2 percent in May from the previous month, influenced by a 35 percent drop in mandarins, 39 percent fall in kiwifruit and 6.5 percent drop in tomatoes. Meat, poultry and fish prices gained 0.8 percent, led by a 6.1 percent gain in chicken and a 7.2 percent increase in lamb. Avocado prices reflected both higher prices and smaller fruit, with the New Zealand Avocado Growers Association noting harvest volumes in the year to June were down to around half that for the previous season.

“Seasonality impacts avocado prices,” Stats NZ prices manager Matthew Haigh said. “Typically, avocado prices peak in July and August, as the main harvest season is from August to March.”

Food prices fell 0.1 percent in the year to May, influenced by a 10 percent drop in fruit and vegetable prices as lettuce prices fell 52 percent, tomatoes dropped 24 percent and broccoli slipped 43 percent. Stats NZ said the falls follow large price increases in 2017, as New Zealand growers lost crops due to poor weather. 

Despite the overall price fall, there were increases in restaurant meals and ready-to-eat food prices, up 2.9 percent, and non-alcoholic beverage prices, up 4.6 percent. The minimum wage increase of 75 cents to $16.50 an hour on April 1, 2018 may be a partial factor for these price increases, the statistics agency said.

The food price index accounts for about 19 percent of the consumers' price index, which is the Reserve Bank's mandated inflation target when setting interest rates.

(BusinessDesk)

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