NZ food prices gain in July, on more expensive veggies, fruit and meat

Thursday 13th August 2015

New Zealand food prices rose in July, snapping three months of decline, as more expensive fruit, vegetables and meat offset a decline in grocery prices.

The food price index rose a seasonally adjusted 0.5 percent in July, after falling 0.8 percent in June, according to Statistics New Zealand. On an annual basis food prices increased 1.2 percent in the year through July.

Food prices account for about a fifth of the broader Consumers Price Index, which dropped below the Reserve Bank's 1 percent to 3 percent target range, rising at an annual pace of 0.3 percent in the year ended June 30. Meanwhile, the non-tradable component, which covers domestic inflation, was at its lowest level since December 2001 at 2 percent.

Central bank governor Graeme Wheeler has since cut the official cash rate to 3 percent, in a bid to stimulate economic growth as he contends with an unexpectedly sharp slump in dairy prices and the prospect of low inflation becoming embedded in New Zealand.

Today's data shows fruit and vegetable prices climbed 3 percent in the month, but were up 0.6 percent after seasonal adjustment stripped out the cost of more expensive winter vegetables, the agency said. Meat, poultry and fish price rose 1.3 percent, reflecting higher prices for chicken. Non-alcoholic beverages rose 0.1 percent, while restaurant meals and ready to eat food prices were unchanged. Grocery food prices declined 0.1 percent in July, on the back of cheaper bread and butter.

On an annual basis, fruit and vegetable prices increased 5.7 percent, and accounted for more than half the overall annual increase, Statistics NZ said. Meat, poultry and fish prices rose 1.5 percent in the year through July, pushed up by more expensive beef, while non-alcoholic beverages gained 3.9 percent. Restaurant meals and ready to eat food gained 1.9 percent. Grocery food prices fell 1.5 percent.

BusinessDesk.co.nz

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