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Meat prices boost July food prices

Tuesday 13th August 2019

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Rising chicken, lamb and beef prices helped push New Zealand’s food prices higher in July.

Food prices rose 1.1 percent from June and were 0.9 percent higher than in July last year, Stats NZ said.

Meat and poultry prices lifted 2.8 percent on the month after lifting 0.2 percent in June. Mutton, Lamb and hogget prices jumped 7.6 percent while poultry prices were up 4.5 percent.

Meat and poultry prices were up 5.8 percent from a year ago.

Lamb chop prices reached an all-time high in July, up 1.7 percent on the month, Stats NZ said. 

“There has been increased global demand for lamb and beef, following a shortage of pork in China due to African swine fever,” said consumer prices manager Sarah Johnson.

Vegetable prices rose 3.7 percent on the month but were down 17 percent from a year ago.

The food price index accounts for about a fifth of the consumers price index, which is one measure the Reserve Bank uses to pursue its inflation target when setting interest rates.

The central bank last week surprised markets when it cut rates by 50 basis points to a record low 1.0 percent as it looks to ensure inflation increases to the mid-point of the target range, and employment remains around its maximum sustainable level.

Inflation is currently 1.5 percent and the central bank's target is 1-3 percent with a focus on the midpoint. 

Separately, Stats NZ's new measure of rental price inflation remained steady in July.

It draws on Ministry of Business, Innovation and Employment tenancy bond data, replacing a quarterly survey of landlords and also feeds into the CPI.

The 'stock' measure shows rental price changes across the entire renting population, whereas the 'flow' measure only captures dwellings that have a new bond lodged against them.

The national stock rental price index for July rose 3.3 percent from the same month a year earlier, following an annual increase of 3.3 percent in June. It rose 0.3 percent in July from June.

On the flow basis, rental prices rose 3.7 percent on the year in July after lifting 3.9 percent in June.  It was down 0.7 percent on the month.

(BusinessDesk)

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