Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ food prices rise in April on more expensive eggs, dairy

NZ food prices rise in April on more expensive eggs and dairy, inflation still contained

By Suze Metherell

May 13 (BusinessDesk) – New Zealand food prices rose in April, snapping two declines, as eggs and dairy products lifted grocery bills in the month, though inflation remained contained as the strong kiwi dollar kept a lid on imported prices.

The food price index advanced 0.6 percent in April following a 0.3 percent fall in March, according to Statistics New Zealand. Food prices increased 1.5 percent on an annual basis, accelerating from the 1.2 percent pace in March with all five components of the index rising in the year.

The monthly gain was led by a 1 percent gain in grocery food prices, as milk, cheese and eggs gained 1.4 percent, while bread and cereals rose 1 percent as did confectionary, nuts and snacks. On an annual basis, grocery prices rose 1 percent with milk, cheese and eggs making the biggest contribution, up 6.7 percent on a 28 percent lift in the price of butter.

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. Governor Graeme Wheeler has hiked interest rates 50 basis points since March in a bid to curb inflation, although April’s first quarter consumers price index showed a slower-than-expected pace of inflation.

“The low level of food price inflation, along with the effects of the high New Zealand dollar on other areas of tradable inflation, are contributing to the overall contained inflation environment,” Christina Leung, an ASB economist said in a note. “We expect rising inflation pressures will become more apparent later next year when the dampening influence of the high New Zealand dollar lessens, and economic activity ramps up and underpins a lift in underlying inflation.”

Last week Wheeler signalled rate rises may not be as regular as previously assumed if the exchange rate remains strong. The high kiwi dollar weakens tradables inflation and would be a factor in the bank’s view of the “extent and speed” of hikes in interest rates, Wheeler said at the time.

Today’s figures show meat, poultry and fish prices rose 0.9 percent as beef prices rose 3.1 percent and pork advanced 4.5 percent. Meat prices led the annual rise, up 2.6 percent, with beef gaining 2.6 percent, lamb rising 9 percent and pork increasing 9.1 percent. Overall meat prices are 0.8 percent below the October peak, Statistics NZ said.

Fruit and vegetable prices rose 0.4 percent in April on seasonally higher prices for tomatoes and strawberries, and increased 0.9 percent in the year.

Restaurant meals and ready-to-eat food prices rose 0.3 percent in the month and gained 2.2 percent on an annual basis, with ready-to-eat food rising 2.4 percent and restaurant meals increasing 1.5 percent.

Prices of non-alcoholic beverages fell 0.8 percent in April, the only sub-group to decline in the month. On an annual basis, prices rose 1.6 percent, as coffee and tea increased 3 percent while soft drinks, juices and water gained 1.2 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news