Food Prices Up 1.1 Per Cent In November

Food Price Index: November 2000

Food prices rose 1.1 per cent between October and November 2000 and are 3.5 per cent higher than in November 1999, according to Statistics New Zealand. Fresh fruit and vegetable prices made the most significant upward contribution to the Food Price Index in November, however price increases were also recorded for the three other food categories: meat, fish and poultry; grocery food, soft drink and confectionery; and restaurant meals and ready-to-eat food.

Prices for lettuces, potatoes and tomatoes were the main upward item contributors to the November Food Price Index.

Fruit and vegetable prices (after removing normal seasonal change) rose by 4.1 per cent in November 2000 with price increases for fresh fruit and vegetables making the greatest contribution to this movement. Fresh fruit prices rose by 3.0 per cent in November and fresh vegetable prices increased by 6.9 per cent. Fruit and vegetable prices are quite volatile from month to month. They rose 3.0 per cent in October but fell by 1.7 per cent in September. However, fruit and vegetable prices have been trending upward for the past 13 months. If the effect of fruit and vegetable prices was removed, food prices overall would have risen by 0.7 per cent in November.

Meat, fish and poultry prices recorded an increase of 1.6 per cent in November 2000 after falling by 0.8 per cent in October. Price rises for steak were the main contributor to this month's increase. Beef and veal prices increased 2.8 per cent in November after falling 2.0 per cent in October due to widespread specialling. Domestic prices of meat are likely to reflect the New Zealand dollar-value of export prices, as most meat produced in New Zealand is exported. Meat prices have been rising steadily since July 1999, putting upward pressure on food prices overall.

Higher prices for blocks of chocolate and soft drinks pushed grocery food prices up 0.5 per cent in November following a decrease of 0.2 per cent in October. Many grocery food items move considerably from month to month (often due to items moving on and off special). This month the same percentage of items went 'on special' as came 'off special', whereas last month a significantly higher proportion of items went 'on special'. Notable decreases this month came from boxed assorted chocolates and potato crisps, mainly due to heavy in-store specialling. Grocery prices, which overall represent half the weight of the Food Price Index, have been steady since November 1998.

Dining out in restaurants was more expensive in November with prices for restaurant meals rising by 0.6 per cent. This increase combined with a 0.7 per cent rise for ready-to-eat food helped push up the restaurant meals and ready-to-eat food subgroup by 0.6 per cent. The increase this month follows a 0.3 per cent increase in October and a 0.2 per cent increase in September.

Fruit and vegetable prices are 15.5 per cent higher in November 2000 than in November 1999. Over the same period, meat, fish and poultry prices rose 5.3 per cent, grocery food prices rose 0.2 per cent and restaurant meals and ready-to-eat food prices rose 3.3 per cent.

Ian Ewing DEPUTY GOVERNMENT STATISTICIAN

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