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New Zealand food prices fall in February

Thursday 11th March 2010

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New Zealand food prices declined by 1.3% in February on the back of falls in fruit and vegetable costs, as well as lowered meat, poultry and fish prices.

Additionally, Statistics New Zealand’s food price index measured a February year on year increase of 0.7%, the lowest annual increase since a 0.4% gain for the year to April 2005. However, over a two-year timeframe, food prices are 9.6% higher.

UBS New Zealand economist Robin Clements said that solely looking at monthly food price movements can be misleading, as factors such as weather and sale specials can add a strong degree of volatility to their costs.

“Food prices jump around a lot, and you’re far better to look at the averages across a few months,” he said. As a case in point, February’s food price decline followed a 2.1% increase in January and a 0.3% fall in December 2009.

Four out of five subgroups recorded by Statistics NZ recorded lower prices. Fruit and vegetables dropped 3.5%, meat, poultry and fish fell 2.4%, grocery food was down 0.8% and non-alcoholic beverages declined 1.9%. Restaurant meals and ready-to-eat food prices were unchanged.

Individual items displaying the most significant falls in February were porterhouse/sirloin steak with a 17.6% decline as extensive discounting saw its price drop to a level last seen in August 2007. Apples’ 26.6% price drop reflects a typical fall as the new season’s crop becomes widely available.

Minced beef on the other hand rose 5.2% as many special prices were removed. Across the February year, lamb chops have increased 20.7% and sausages have risen 13.7%.

Other upward month of February contributions came from tomatoes rising 12.2% and strawberries increasing by 36.3%.

For the year to February 2010, fruit and vegetable prices have decreased 1.9%, with falls being recorded for the past seven months. The most significant downward contribution across the year has come from 20.1% lower potato prices and kiwifruit falling by 31.1%.

Businesswire.co.nz

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