Expensive veggies, fruit and meat push food prices up

A three month decline in New Zealand food prices snapped in July as more expensive fruit, vegetables and meat offset a decline in grocery prices.

The food price index rose a seasonally adjusted 0.5% in July, after falling 0.8% in June, according to Statistics New Zealand.

On an annual basis food prices increased 1.2% 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 1-3 % target range, rising at an annual pace of 0.3% 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%.

Central bank governor Graeme Wheeler has since cut the official cash rate to 3%, in a bid to stimulate economic growth as he wrestles 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% in the month, but were up 0.6% after seasonal adjustment stripped out the cost of more expensive winter vegetables.

Meat, poultry and fish price rose 1. %, reflecting higher prices for chicken.

Non-alcoholic beverages rose 0.1%, while restaurant meals and ready-to-eat food prices were unchanged.

Grocery food prices declined 0.1% in July, on the back of cheaper bread and butter.

On an annual basis, fruit and vegetable prices increased 5.7%, and accounted for more than half the overall annual increase.

Meat, poultry and fish prices rose 1.5% in the year through July, pushed up by more expensive beef, while non-alcoholic beverages gained 3.9%.

Restaurant meals and ready-to-eat food gained 1.9%. Grocery food prices fell 1.5 %.

(BusinessDesk)

Suze Metherell
Thu, 13 Aug 2015

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Expensive veggies, fruit and meat push food prices up

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