NZ food prices rise in May on expensive vegetables
By Suze Metherell
June 13 (BusinessDesk) - New Zealand food prices rose in May as a drop off in the price of meat, poultry and fish was
offset by a 16 percent gain in vegetables.
The food price index advanced 0.6 percent in May, matching April's 0.6 percent gain, according to Statistics New
Zealand. On an annual basis, food prices have increased every month for the past year with May's annual gain picking up
to 1.8 percent from a 1.5 percent advance in April, with all five components gaining.
The monthly increase was spurred by a 6.9 percent jump in fruit and vegetable prices, as vegetable prices climbed 16
percent, offsetting a 3.9 percent drop in fruit prices, largely weighed on by discounted bananas. On an annual basis
fruit and veggies are 5.6 percent more expensive than they were a year ago, as broccoli, oranges and tomatoes become
more costly, offsetting cheaper capsicums and bananas.
The Reserve Bank is watching the pace of rising consumer prices, of which food prices contribute almost 19 percent,
having flagged increased price pressures as a reason behind its shift to tighter monetary policy this year. Yesterday
governor Graeme Wheeler hiked interest rates for a third time since March to 3.25 percent to curb inflation, and
surprised speculators affirming the track of future hike rates after April’s first quarter consumers price index showed
a slower-than-expected pace of inflation. Second quarter CPI is due next month.
Meat, poultry and fish prices fell 1.5 percent in May, to be the largest downward contribution in the month, as the
beef, pork and poultry all recorded declines, while lamb had a marginal increase. On an annual basis price rose 0.5
percent, meat and poultry prices are now 2.4 percent below their October peak, while beef has come off last month's peak
and lamb is 17 percent below its August 2011 peak.
Grocery prices fell 0.1 percent in May, as breakfast cereals dropped 2.5 percent and preserved milk fell 3 percent in
the month. In the year prices increased 0.9 percent, as milk cheese and egg prices surged 8 percent, with fresh milk
costing 11 percent more than it did last year, to be 1 percent above its previous peak in February 2011, Statistics NZ
said.
The price of Restaurant meals and ready-to-eat food edged up 0.1 percent in the month, for an annual gain of 2.1
percent. Non-alcoholic beverages rose 0.2 percent in May, and increased 2.7 percent on a yearly basis.
(BusinessDesk)