Food Prices Up 0.3 Per Cent In September

Food Price Index: September 2000

Food prices rose 0.3 per cent between August and September 2000 and are 2.0 per cent higher than in September 1999, according to Statistics New Zealand. The meat, fish and poultry subgroup and the grocery food, soft drinks and confectionery subgroup made significant upward contributions to September's 0.3 per cent rise while fruit and vegetable prices fell.

On average, food prices have risen 0.4 per cent per month from April this year. This compares with an annual average growth for 1998 of 0.3 per cent per month while on average, monthly growth in food prices for 1999 remained flat. From April this year there has been an upward push from beef and lamb prices, whereas grocery food prices have shown negligible growth. Fruit and vegetable prices are more volatile, reflecting short-term supply factors, but have recorded successive price falls over the past three months.

Price increases for beef made the largest contribution to the 1.7 per cent increase in the meat, fish and poultry subgroup in September 2000. Also contributing to the increase were higher prices for steak, ham, mince, lamb and sausages. A significant downward contribution came from fresh chicken pieces. The meat, fish and poultry subgroup is now 5.6 per cent higher than in September 1999. This is the highest recorded annual increase since a 5.7 per cent increase was recorded for the year to December 1998. Beef prices are 13.1 per cent higher than in September 1999, while lamb prices are up 9.7 per cent and fish up 4.0 per cent. The rise in domestic meat prices reflects exchange-rate influenced increases in export prices. Poultry prices, however, are 5.3 per cent lower than in September 1999, the thirteenth consecutive month in which the annual movement for poultry has fallen.

Grocery food, soft drinks and confectionery prices rose by 0.5 per cent in September. This follows a fall of 0.4 per cent in August. The prices of many of the items in this subgroup have changed little over the past year, but have moved considerably month to month (often due to items moving on and off special). The main items pushing up the subgroup this month were chocolate confectionery, milk, dried soup mixes and eggs. Significant downward contributions came from lower prices for potato crisps and chocolate biscuits.

Fruit and vegetable prices fell 1.7 per cent in September 2000, following 1.7 per cent and 0.2 per cent price falls in July and August 2000, respectively. Fresh vegetable prices fell 6.7 per cent in September driven strongly by a 26.5 per cent fall in seasonally adjusted tomato prices. Lesser downward contributions came from grapes, cabbage, citrus fruit and salad greens. Fruit and vegetable prices are 2.6 per cent higher than in September 1999.

Ian Ewing DEPUTY GOVERNMENT STATISTICIAN

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