Monday 13th October 2014
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New Zealand food prices fell in September, as cheaper cheese and seasonal fruit and vegetables offset rising meat prices.
The food price index fell 0.8 percent last month, after rising 0.3 percent in August, according to Statistics New Zealand. The index was 0.1 percent lower than it was in September 2013, as supermarket discounting of bread led to cheaper groceries.
The cost of food makes up about 19 percent of the broader consumer price index, a measure of inflation in the economy, compiled by the national statistician. Figures for the September quarter are due this month, and will be watched closely for any sign of inflationary pressure, after softer than expected readings earlier this year. Slower than expected inflation figures saw Reserve Bank governor Graeme Wheeler keep the official cash rate on hold at 3.5 percent in September, after hiking them 100 basis points since March.
"Over the past year, food prices have largely remained flat," Christina Leung, an economist at ASB Bank, said in a note. "The result adds to other inflation indicators pointing to a contained inflation environment. With little urgency for the RBNZ to resume its tightening cycle, we continue to expect the RBNZ will keep the OCR on hold at 3.5 percent until March 2015."
September food prices weakened from August as fruit and vegetable prices fell 6.5 percent, with vegetables dropping 11 percent led by lettuce, tomatoes, cucumber and capsicum. Grocery food prices slipped 0.2 percent, as cheese prices fell 3.5 percent and pasta declined 3.4 percent.
Meat, poultry and fish prices rose 1.2 percent in the month, with the price of pork up 6.5 percent, lamb increasing 4.9 percent and beef rising 1.6 percent. Non-alcoholic beverages rose 0.6 percent, while restaurant meals and ready-to-eat foods were 0.1 percent more expensive in September.
On an annual basis, fruit and vegetable prices decreased 3.3 percent in September compared to the same month a year earlier. Grocery food prices fell 1.6 percent, led by bread as supermarkets ran discount offers, Statistics NZ said.
Meat, poultry and fish prices rose 2.2 percent in the year, led by a 12.5 percent climb in the price of mutton, lamb and hogget, while chicken prices rose 5.5 percent and beef and veal increased 2.1 percent. Non-alcoholic beverages rose 2.9 percent on an annual basis, while the price of restaurant meals and ready-to-eat food increased 1.7 percent.
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