NZ Food Prices Flat in July as Eating Out Gets More Expensive, Fruit Gets Cheaper
By Paul McBeth
Aug. 11 (BusinessDesk) - New Zealand food prices were unchanged last month as the cost of dining out got more expensive, offsetting cheaper fruit.
The food price index was flat on a seasonally adjusted basis in July, holding the annual increase at 3 percent, Statistics New Zealand said. That was due to a 2.4 percent monthly decline in fruit prices, led by hefty drops in the price of avocados and strawberries, balancing out a 0.7 percent increase in restaurant meals and a 4.6 percent jump in the price of hot drinks such as coffee and tea.
"Strawberries are unseasonably cheap for this time of year," consumer prices manager Matthew Haigh said. “They typically reach their lowest price in December, but are currently dropping in price due to more imports from Australia."
Food prices account for about 19 percent of the consumers price index, which is the Reserve Bank's mandated inflation target when setting interest rates. A spike in food prices and a recovery in oil prices earlier this year led to a jump in inflation, which has been subdued in recent years, however as those movements flatten out the pace of CPI increase is expected to slow in early 2018, the Reserve Bank said yesterday. Annual CPI of 1.7 percent in the June quarter was also below expectations.
Today's figures show more expensive produce was driving the annual increase in food prices, with fruit and vegetable prices rising 8.2 percent in July from the same month a year earlier. Grocery food prices rose an annual 3.1 percent, due largely to the global recovery in dairy prices driving a 7.6 percent increase in prices for milk, cheese and eggs.
Stats NZ's Haigh said dearer vegetables and dairy products were probably behind the 2.5 percent annual increase in restaurant prices. Consumer spending on hospitality was buoyed earlier this year by visitors accompanying the British & Irish Lions rugby tour, and figures this week showed that spending tapered off in July.
Meat, poultry and fish prices rose 1 percent in the year as cheaper pork offset dearer mutton, lamb and hogget, while non-alcoholic drink prices rose 1.6 percent, led by more expensive coffee, tea and other hot drinks.
Grocery food prices were flat in the month of July on a seasonally adjusted basis, while meat, poultry and fish prices fell 0.8 percent, non-alcoholic beverage prices increased 0.3 percent and restaurant meals and ready-to-eat food increased 0.2 percent.