Food prices fall for third month on cheaper veges, milk gets more expensive
New Zealand food prices fell for a third month due to cheaper vegetables which were in season, though more expensive milk pushed up prices over the year.
The food price index slipped 0.1 percent in December, adding to the 0.2 percent and 1 percent declines in the prior two months, according to Statistics New Zealand. On an annual basis, food prices were up 1.5 percent, accelerating from a 1.4 percent annual increase in November.
The monthly decline was led by a 3.7 percent fall in the price of vegetables, with cheaper lettuces, broccoli and cabbages, and were down 1.3 percent on the year.
Fresh milk prices rose 2.7 percent in December, and were up 9.4 percent on the year. More expensive dairy products were the main driver of the annual increase in food prices, with yoghurt up 10 percent, cheese up 7.7 percent and other milk products up 10 percent.
Last month the Reserve Bank gave a stronger signal in its monetary policy statement that interest rates will rise this year, noting that inflationary pressures are "projected to increase." Food prices make up almost 19 percent of the consumer price index, and the December CPI is scheduled for release next week.
Grocery food prices were flat in December, though up 2 percent in the year. Meat, poultry and fish prices rose a monthly 0.8 percent and an annual 1.6 percent.
Non-alcoholic drinks prices fell 2.1 percent in December, for an annual increase of 3 percent, and restaurant meals and read-to-eat foods prices increased a monthly 0.5 percent and an annual 1.9 percent.