Vegetables and dairy push up food prices

Food prices rose 1.6 percent in the July 2010 month, Statistics New Zealand said today, reflecting higher dairy prices and a winter increase in vegetable prices. This follows a 1.3 percent increase in June and a fall of 0.7 percent in May.

The fruit and vegetables subgroup rose 8.7 percent in July due to a seasonal rise in vegetable prices. Higher lettuce (up 44.9 percent) and tomato (up 13.9 percent) prices were the main contributors. Vegetable prices normally increase in winter months, with lettuce prices typically peaking in July.

"Vegetable prices rose 29 percent over June and July this year, which is about the same as the increase over June and July last year," Statistics New Zealand's prices manager Chris Pike said.

Grocery food prices rose 1.2 percent in July 2010. The major contributors to the increase were fresh milk (up 5.9 percent, on top of a 5.1 percent increase in January) and yoghurt (up 7.0 percent, influenced by reductions in some package sizes).

The meat, poultry, and fish subgroup increased 0.5 percent and the restaurant meals and ready-to-eat food subgroup increased 0.3 percent in the July 2010 month. The non-alcoholic beverages subgroup made a downward contribution in July 2010, with prices falling 1.1 percent.

Food prices fell 1.0 percent for the year to July 2010. This is the third consecutive annual fall in food prices, which has not occurred in the past ten years.

"Food prices rose nearly 17 percent from July 2007 to when they peaked in July 2009, and have fallen 1 percent since," Chris Pike said.

In the year to July 2010, fruit and vegetable prices fell 4.3 percent, while meat, poultry, and fish prices fell 2.8 percent. Restaurant meals and ready-to-eat food prices rose 2.1 percent during the same period.