New Zealand food prices fell last month, led by cheaper meat and in-season fruit and vegetables, though milk rose to a nine-month high.
The food price index fell 0.3 percent in February, following a 1.9 percent drop a month earlier, in its sixth decline in seven months, according to Statistics New Zealand. Annual food prices decreased 0.1 percent.
Fruit and vegetable prices fell 1.6 percent in February, with cheaper apples and grapes, while meat, fish and poultry declined 1.4 percent, led by discounted porterhouse/sirloin steak and chicken pieces.
Grocery prices were unchanged in the month, though fresh milk prices rose 2.1 percent to their highest level since May last year. Non-alcoholic beverage prices rose 1.3 percent, while restaurant means and ready-to-eat food prices slipped 0.1 percent.
Food prices account for almost 19 percent of the consumers price index, which is sitting below the Reserve Bank's target band at 0.9 percent.
Central bank governor Graeme Wheeler will review monetary policy tomorrow and is expected to keep the official cash rate at 2.5 percent, with benign inflation giving him scope to help invigorate the economic recovery facing a drought across the North Island.
But a bubbling Auckland property market has been cited as a threat to future financial stability.
"Food prices have been subdued over the past year and a key contributor to the subdued headline CPI," ASB economist Jane Turner says in a note. "Over the coming year, we are likely to see the mixed influence of lower beef and lamb prices versus higher dairy prices."
Today's figures showed fruit and vegetable prices were up 6.3 percent annually, with non-alcoholic drinks rising an annual 0.2 percent and restaurant meals and read-to-eat food prices up 0.7 percent.
Meat, poultry and fish prices fell an annual 2.1 percent and grocery prices shrank 2.1 percent in the year.