Food prices rose last month, led by fruit and veg

Wednesday 13th October 2010

Rising prices of green-leaf vegetables helped lift food prices higher last month as wild weather hit some crop-producing regions.

The Food Price Index rose 0.7% in September after a 0.1% decline a month earlier, Statistics New Zealand data. That was led by 2.6% increase in fruit and vegetable prices, with the cost of broccoli surging almost 50% and lettuce prices rising 14%. Fruit and vegetable prices have climbed 6.8% in the year ended Sept. 30, the first such annual gain since July last year.

"Some areas of the country experienced unusual weather conditions in September this year, including high winds, flooding and snow, which influenced the price of some vegetable items," the department said in its report.

Food prices have been falling over the past year with retailers forced to cut their margins as New Zealand's economic recovery slowed down, with households focusing on repaying debt rather than ramping up spending. Food prices rose 1.3% on an annual basis, the first such increase in four months.

Grocery food rose 1.2% last month after a 0.6% increase in August, with lower levels of discounting for snack foods, chocolate and yoghurt. Meat, poultry and fish prices fell 1%, led by a 7.6% decline in the cost of chicken and a 6.3% fall in lamb prices.

Restaurant and takeaway food prices fell 0.1% last month, while non-alcoholic beverage prices rose 0.7%.

The data is the month before the government hiked consumption tax on goods and services, and data showing spending on electronic cards indicated there was a small spike in spending before the increase in prices.

Businesswire.co.nz

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