NZ food prices fall in April as higher vege prices offset by lower grocery costs

New Zealand food prices fell in April as increases in vegetable prices were offset by declines for grocery foods.

The food price index declined a seasonally adjusted 0.2 percent last month, Statistics New Zealand said. On an unadjusted basis, food prices fell 0.8 percent on the month.

Fruit and vegetable prices increased overall by 4.2 percent, with a 1.2 percent decline in fruit prices offset by a 9.1 percent gain in vegetable prices, Stats NZ said. Meanwhile, grocery food prices, which account for more than a third of the index, dropped 2.1 percent on the month, the agency said.

"The cost of throwing a party fell in April, with lower prices for grocery foods such as potato chips, chocolate biscuits, and crackers," Stats NZ consumer prices manager Matthew Haigh said. "Other party favourites, such as soft drinks, grapes, and carrots, also fell in price.

"Vegetable prices were influenced by some seasonal increases as well as heavy rain affecting some crops," Haigh said. "The largest upwards contributors were mostly salad items, with higher prices for tomatoes, lettuce, cucumber, and avocados."

The average price for a 250-gram pack of crackers was $2.91 in April, down from $3.15 in March and the lowest price for crackers since August 2010, the agency said.

Non-alcoholic beverage prices fell 2.7 percent in April, influenced by a 3.2 percent decline in soft drink prices. The average price for a 1.5 litre soft drink was $2.35 in April, down from $2.56 in March.

Meat, poultry, and fish prices fell 1.7 percent, with lower prices for pork and processed meat. The average price for a kilogram of pork chops was $13.84 in April, down from $15.68 in March, $15.89 in April last year, and at the lowest level since May 2008 when it was at $13.81, Stats NZ said. Chicken prices dropped 4.2 percent over the year and have been falling annually since June 2015, the agency said.

Food prices overall increased 0.2 percent in the year through April, led by a 1.9 percent gain in the price of restaurant meals and ready-to-eat food.

The food price index accounts for about 19 percent of the consumers price index, which is the Reserve Bank's mandated inflation target when setting interest rates. Annual inflation rose to 2.2 percent in the first three months of the year, well above the central bank's forecast of 1.5 percent, however Reserve Bank governor Graeme Wheeler today kept the official cash rate unchanged at 1.75 percent and said the recent jump in consumer prices may only be temporary.

(BusinessDesk)