NZ food prices rise for third month on dearer fruit and veg

NZ food prices rise for third month as fruit and veg gets more expensive in June

By Jason Krupp

July 13 (BusinessDesk) - New Zealand food prices continued to track upward in June for a third month with fruit and vegetable prices again leading the index higher.

The food price index rose 1.4% in the month, according to Statistics New Zealand, and followed from a 0.5% increase in May. All four of the five subcategories saw price increases in June, led by fruits and vegetable costs, which rose 12.2% with this year’s flooding in Queensland exacerbating typical end of season price hikes.

“We expect strong global soft commodity prices will continue to flow through to prices at the retail level in NZ over the remainder of 2011,” ASB economist Christina Leung said in a statement. “The Queensland floods earlier this year has reduced the supply of tomatoes and capsicum from Australia, thus driving prices up further.”

That was followed by grocery prices, which rose 0.7%, a 0.5% increase in the price of restaurant meals and ready to eat food, and non-alcoholic beverage prices, which rose 0.2%.

Meat, poultry and fish was the only category to record prices declines in the month, with costs at the till falling 3.2%, mainly as a result of retailer discounting, the department said.

For the year ending in June, food prices increased 7.5%, the largest annual increase since July 2009. That outstrips consumer price inflation, which currently stands at 4.5% for the year ending March 31, according to the Reserve Bank.

Leung said even with the government’s hike in consumption tax last year, “higher global soft commodity prices has largely underpinned the increase in food prices over the past year.”

Looking at the price increases of the subgroups on a 12 month basis ending in June, fruit and vegetable rose 15.7%, non-alcoholic beverages rose 8.1%, grocery food rose 8%, restaurant meals and ready-to-eat foods rose 4.5%, and meat, poultry and fish rose 3.5.

(BusinessDesk)

© Scoop Media