GDP and Inflation

Food prices decline in September

Tuesday October 16, 2012 Kelly Dustow

Food prices eased in September, down by 0.9 percent on the previous month and 0.3 percent on the same month last year.  This is consistent with international prices, which are down 4.1 percent on the year.  Prices are expected to recover along with the global economy, but also because of unfavourable growing conditions in India, Europe and the US.



Food prices in September declined by 0.86 on the previous month


Most of the decline in the month came from lower prices for fruit & vegetables (down 2.1 percent), grocery food (down 1.57 percent), and non-alcoholic beverages (down 0.55 percent).



While there was an overall decline in September’s food prices, there was still an increase in the price of meat, poultry & fish (up 0.16 percent), and restaurant and ready-to-eat meals (up 0.24 percent).

Within the fruit & vegetable subgroup, fruit prices declined by 3.7 percent and vegetable prices declined by 1.2 percent.  The largest price declines came from strawberries (down 33 percent), cucumber (down 33 percent), capsicums (32 percent), and cabbage (down 13.8 percent).  This was partially offset by the price of Broccoli, which increased from $4.48 per kg in August to $9.43 per kg in September, a 110.5 percent increase.

The decline in grocery prices came mainly from decreases in the price of dairy products such as milk and yoghurt over the past month.



Annually, food prices in September 2012 were 0.32 percent lower than the same time last year


Most of the decline came from lower grocery prices, which were down 3.5 percent.  Grocery food includes goods such as breads, cereals, milk, cheese, and eggs.  There has been a significant fall in the price of fresh milk (down 9.2 percent), cheese (down 10.8 percent) and yoghurt (down 6.8 percent) over the past year.

Prices for meat, poultry & fish, grocery food, and non-alcoholic beverage all declined, whereas the price of fruit & vegetables and restaurant and ready-to-eat foods increased since September last year.

There has been a large rise in the price of fruit and vegetables over the past year, increasing by 7.8 percent.



Internationally, food prices continue to fall  

According to the UN Food and Agricultural Organisation (FAO) World Price Index, food prices for September were 4.1 percent down on year-earlier levels.



 The largest decline in food prices continues to come from sugar (down nearly 25.2 percent), followed by dairy, oils and meat.  Cereal prices have also continued to increase on year earlier levels, with cereal up 7.5 percent since September last year. 

The price of meat and dairy continue to decline since last year. However, this decline might be just a recovery from last year’s price boom.  The market for dairy remains ‘firm’ as quoted from the FAO due to unfavourable growing conditions in India, Europe and the United States coupled with increasing feed costs.