GDP and Inflation

August food prices flat on previous month

Monday September 17, 2012 Kelly Dustow

Food prices increased marginally in August – by 0.1% according to Statistics New Zealand’s latest release of its food price index.  The most significant increase came from fruit and vegetable prices, which were 1.5% up in August. Prices for fruit and vegetables tend to rise in winter months and have been rising month on month since April.

 

 

In particular, the vegetable prices which rose 2.1%, while fruit prices were up 0.7%.  Price increases included those for tomatoes (up 31%), kiwifruit (up 16%), apples (up 12%) and bananas (up 8.9%). However, the price of broccoli declined by 34% over the month.

 

During the same period, the price of grocery food, and restaurant and ready-to-eat meals all decreased.  There was no change in the price of meat, poultry and fish.

Despite food prices increasing over the past month, food prices are still lower than last year.  Food prices in August 2012 were 0.5% lower than the same time last year.

Compared to August last year, prices for fruit and vegetables, non-alcoholic beverages, and restaurant and ready-to-eat foods have all increased, while the price of grocery food and meat, poultry and fish have declined.

 

Most of the decline in food prices came from lower grocery prices over the past year, down 2.1%.  Grocery food includes goods such as breads, cereals, milk, cheese, and eggs. Specifically, there has been a significant fall in the price of fresh milk (down 9.2%), cheese (down 8.3%) and yoghurt (down 2.6%). This is due to a recent fall in international dairy prices experienced overseas, although recent trading months have shown milk prices to be picking up again.

 

Internationally, food prices continue to fall.  According to the UN Food and Agricultural Organisation World Price Index, food prices for July were 7.8% down on year-earlier levels.

 

 

 

The most significant decline in world food prices since August last year came from sugar (down nearly 25%), followed by dairy, oils and meat.  Cereal prices have continued to increase on year earlier levels, with cereal up 3.1% since August last year.

 

The price of both dairy and meat, two of our major export commodities, are lower than last year. However, dairy prices have shown improvement by rising 1.6% since July, as well as meat prices showing an increase of 2.2%.  These increases in dairy and meat prices may continue, as cereal prices and drought conditions effect other international markets.