Food prices rise 1.9% – first gain in 5 months

New Zealand food prices rose for the first time in five months in January, led by fruit, vegetables and grocery items such as biscuits, yoghurt and bread.

The food price index climbed 1.9 percent in January, following a 0.2 percent decline in December, according to Statistics New Zealand. All five categories of food measured rose in the latest month.

Fruit and vegetable prices rose 3.5 percent, led by seasonally higher prices for mandarins, apples, lettuce, broccoli, strawberries and kiwifruit. Grocery prices rose 1.9 percent and made the biggest contribution to the food price index's monthly gain.

Prices for meat, poultry and fish rose 2.2 percent and non-alcoholic beverages gained 2.2 percent. Restaurant and fast-food meal prices rose 0.2 percent.

Food prices rose 0.8 percent from January 2012, with fruit and vegetables rising 5.9 percent, leading in both percentage terms and index contribution. Kumara, apples and avocados rose.

Grocery food prices fell 1.5 percent in the year, led by a 9.4 percent drop for fresh milk, a 6 percent decline in cheese, an 18 percent fall in butter and a 2.4 percent decline for bread.

Food prices account for almost 19 percent of the consumer price index and the New Zealand dollar climbed after the figures were released.

The food prices report followed the release of the BNZ-Business New Zealand Performance of Manufacturing Index, which climbed 4.8 points to 55.2 last month, the highest since May last year and the highest for the month of January since 2007.

The kiwi dollar recently traded at 84.58 US cents from 84.11 cents before the reports were made public.

(BusinessDesk)

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10 Comments & Questions

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I hope this topic gets debated further. Loathe as I am to refer to trash TV I had a call to turn On Cambell on TV3 and caught up with the earlier part 'on demand'. Seems he did a fairly hard hitting comparison of a basket of food shopping NZ versus Aus and London and we were massively overpriced. I think the comparison was
NZ NZ$200.30
Aus NZ$176.37
UK NZ$128.98

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I guess over pricing is not helped by over taxing on everything, especially increases in fuel tax.

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I had a classic example of NZ's overpriced BS yesterday when I collected a prescription for some antibiotics.

Because these had been prescribed by a specialist the charge was $15. If they had been prescribed by my GP, however, the charge would have been $5. Same drug, same process to dispense them, same chemist even doing the same job.

But because the piece of paper I gave to the chemist was signed by a specialist and not a GP, I had to pay and extra $10!

Now that's the sort of cr*p that makes a 1980s Polish shipyard proud.

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Fascinating conundrum for the Reserve Bank. There is evidence of increasing inflation combined with a stagnant economy and rock bottom interest rates. To curb inflation they can only raise interest rates which will exaccerbate the protracted recession. What we are seeing is the problem of a Reserve Bank with only one tool; interest rates.

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set against the backdrop of a global currency war... ( in which we refuse to bear arms ). The walls are closing in.

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NZ has GST of 15% on everything but direct tax is not low enough to compensate for that level.

The whole point of an indirect tax at the rate of 15% was for personal rates to be almost flat at 15% to 20%.

On top of this we only have two so-called competing grocery chains and they want to merge.

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The other thing about the gst rise was that it became an excuse for much higher increases across the board. It provided a place to hide increases and get away with it unless there was strong competition of course.

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The courage would be to implement a nil income tax rate but x percent consumption tax, with perhaps capital gains/transaction taxes.

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Anything bold, courageous or futuristic will never come from John Key.

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Harmonising all the top income rates at 28% (or 25%) would go a long way to simplifying things and making everyone's lives easier, i.e. more efficient, less time-wasting .... it's a dog's breakfast, 28, 30, 33. Only something an airhead like Dunne could dream up I suspect.

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