Dairy drives NZ food prices higher as butter hits record
By Sophie Boot
Oct. 12 (BusinessDesk) - New Zealand food prices rose in September as dairy products continued to increase with butter prices hitting another record high.
The food price index advanced 0.5 percent on a seasonally adjusted basis in the month, and gained 3 percent for the year to September, Statistics New Zealand said. Fruit and vegetables cost 6.5 percent more than a year earlier, while meat, poultry and fish prices rose 1.4 percent and grocery food prices, which includes dairy, increased 3.7 percent annually.
Butter prices hit a record high, with the cheapest 500-gram block available costing $5.55, up 3 percent in the month and 60 percent from a year earlier. Cheese prices rose 8.6 percent while fresh milk prices were up 8 percent on an annual basis, and yoghurt rose 7 percent.
Consumers price index manager Matthew Haigh said that for every $100 spent on food, Kiwis spent about $10 on dairy products.
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 has said.
Vegetable prices increased 6.5 percent on an annual basis, driven by higher prices for kumara and potatoes, and rose 0.3 percent in the month on a seasonally adjusted basis. Fruit prices rose 4.4 percent annually and were up 0.7 percent in the month.
The price of lamb jumped 15 percent in the year to September 2017, while the price of chicken rose 4 percent and pork dropped 4 percent. Restaurant meals and ready-to-eat food prices rose 2.2 percent on an annual basis.