Food Prices Rise In October

Food Price Index: October 2000

Food prices rose 0.3 per cent between September and October 2000 and are 2.9 per cent higher than in October 1999, according to Statistics New Zealand. Fresh fruit and vegetable price rises made the most significant contribution to this month's increase and there was a smaller upward contribution from restaurant meal and ready-to-eat food prices.

Prices of oranges, lettuces and apples were the leading drivers of the increase in the October Food Price Index. Fruit and vegetable prices (after removing normal seasonal change) rose 3.0 per cent after three successive monthly falls.

Falls occurred overall for meat, fish and poultry and for grocery food, soft drinks and confectionery prices.

Lower beef prices made the most significant contribution to the fall in overall meat, fish and poultry prices in October. Price falls were widespread with many more beef items going on special in October than the previous month. From September to October, beef and veal prices fell 2.0 per cent. This contrasts with a strong upward push from beef and lamb prices from April to September, reflecting increases in export prices.

Grocery food prices fell by 0.2 per cent in October following a rise of 0.5 per cent in September. Price falls for soft drinks in October made the most significant item contribution to the grocery food movement and also to the overall Food Price Index movement. Heavy in-store specialling occurred as a size change to larger bottles was introduced. If soft drink prices had remained unchanged from September to October, the overall Food Price Index would have increased 0.4 per cent and grocery food prices would have risen 0.1 per cent in October. Many grocery food items move considerably from month to month (often due to items moving on and off special). The proportion of items going 'on special' in October was significantly higher than the proportion which came 'off special'. Reports of recent increases in grocery food price items did not show through to a significant extent in the October collection of prices.

On average, food prices have risen 0.3 per cent per month in 2000 after remaining flat in 1999. Fruit and vegetable prices are 10.8 per cent higher than October 1999, meat, fish and poultry prices are up 5.2 percent and grocery food prices are up 0.4 per cent.

Ian Ewing

DEPUTY GOVERNMENT STATISTICIAN

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