Food prices fall

Food prices decreased 0.9 percent in the August 2009 month, Statistics New Zealand said today. This is the largest monthly fall in three and a half years. Lower prices for grocery food, and fruit and vegetables accounted for nearly all of the decrease in the food price index (FPI).

In the August 2009 month, grocery food prices fell 1.3 percent. The biggest contributions came from lower prices for bread (down 2.7 percent), chocolate biscuits (down 6.3 percent), and cheddar cheese (down 6.2 percent). Prices for cheddar cheese, milk, and butter returned to levels last seen in late 2007 or early 2008.

Fruit and vegetable prices decreased 3.3 percent, driven by lower prices for tomatoes (down 10.0 percent), strawberries (down 21.7 percent), broccoli (down 21.8 percent), and avocados (down 25.0 percent).

For the year to August 2009, food prices rose 4.6 percent, which is the smallest annual increase since January 2008. Four subgroups recorded increases: grocery food (up 4.4 percent), meat, poultry and fish (up 9.2 percent), non-alcoholic beverages (up 7.9 percent), and restaurant meals and ready-to-eat food (up 3.7 percent).

The fruit and vegetables subgroup fell 1.1 percent in the year to August 2009, which is the first annual fall since February 2008. The most significant downward contribution came from lower prices for lettuce (down 15.9 percent), which were particularly high in August last year due to unusually wet weather.