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January food prices rise 0.8% from year earlier

Article – BusinessDesk

Feb. 14 (BusinessDesk) – Food prices in January were 0.8 percent higher than a year earlier, driven by higher meat, grocery and take-away costs.By Gavin Evans

Feb. 14 (BusinessDesk) – Food prices in January were 0.8 percent higher than a year earlier, driven by higher meat, grocery and take-away costs.

Higher costs for restaurant meals and ready-to-eat food made the biggest contribution to the increase in Stats NZ’s food price index.

Ready-to-eat food prices rose 3.3 percent in January compared to January 2018. Meanwhile milk, cheese and eggs were 2.9 percent higher, while restaurant meals cost 2.3 percent more. Meat, poultry and fish prices were 1.9 percent higher.

Those increases were partially offset by a 5.8 percent drop in fruit prices, with fruit and vegetable prices overall down 3.7 percent. Non-alcoholic drink prices fell 0.9 percent.

The food price index accounts for about 19 percent of the consumers price index, which is the Reserve Bank’s mandated inflation target when setting interest rates.

On a month-by-month basis, food prices in January rose 1 percent from December, but were down 0.6 percent after seasonal adjustment.

Fruit and vegetable prices rose 4.5 percent, with grocery prices up 0.9 percent. They were the biggest contributors to the gain. Meat and poultry, and non-alcoholic drink prices also rose.

Consumer prices manager Caroline White attributed the jump in fruit and vegetable prices to a return to more normal harvests after bumper production late last year.

Broccoli prices more than doubled from a seven-year low of $1.25 a head in December, she said. Lettuce prices rose 79 percent.

Stats NZ noted that milk prices fell to a 19-month low last month.

“Supermarket milk prices are highly influenced by the farmgate milk price,” White said. “Fonterra’s forecast milk payout was cut multiple times from May last year. While dairy farmers face tougher times, consumers usually benefit from the lower prices when supermarkets pay less to the suppliers.”

Yoghurt prices rose 14 percent, coming off specials in late 2018. Cheese prices rose 4.6 percent, and butter prices rose 2.4 percent.

(BusinessDesk)

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