Largest monthly food price increase in 19 years

Food prices increased 2.7 percent in the August 2008 month, Statistics New Zealand said today.

This is thelargest monthly increase since July 1989, when the rate of GST increased from 10.0 to 12.5 percent.All five subgroups recorded upward contributions to the latest Food Price Index (FPI) increase, with themost significant upward contribution coming from the fruit and vegetables subgroup (up 9.6 percent).

Within this subgroup, the main contribution came from vegetable prices (up 14.5 percent), driven by higher pricesfor lettuce (up 33.6 percent) and tomatoes (up 42.8 percent).

If vegetable prices had remained constant atJuly 2008 prices, the FPI would have risen 1.3 percent.

Vegetable prices have increased by a total of 36.4 percent over the past four months, with growingconditions hampered by unusually wet weather.

Other subgroups that made significant upward contributions were grocery food (up 1.9 percent) and meat,poultry and fish (up 2.6 percent).

The most significant upward contributions to these subgroups came from,in order of significance, higher prices for cakes and biscuits (up 8.0 percent), fresh milk (up 4.4 percent),and lamb (up 16.8 percent).

The most significant downward contribution came from lower prices for yoghurt(down 8.9 percent).Food prices rose 10.6 percent in the year to August 2008, the largest annual increase since the year to May1990.

All five subgroups recorded upward contributions to the annual increase, with the most significantbeing the grocery food subgroup (up 13.1 percent).

Within this subgroup, the main contributions came from higher prices for cheese (up 43.8 percent), bread (up 17.4 percent), fresh milk (up 12.5 percent), and butter(up 87.6 percent).

The fruit and vegetables subgroup rose 19.1 percent in the year to August 2008.

The most significantupward contribution came from higher prices for lettuce (up 145.3 percent).

See also the Hot Off The Press information release Food Price Index: August 2008