Food prices down for the month but up for the year

Food prices fell 1.3 percent in October 2011, but were up 1.1 percent on October 2010, Statistics New Zealand said today. Vegetable prices fell 10 percent and accounted for much of the fall in October, mainly due to seasonally lower prices for lettuces and tomatoes.

The largest individual downward contributions to the October fall in vegetable prices came from seasonally lower prices for lettuce (down 37 percent) and tomatoes (down 29 percent). These were partly offset by higher potato prices (up 8.3 percent). If vegetable prices had stayed the same, food prices would have fallen 0.5 percent in October.

Four of the five food subgroups recorded price falls in October 2011. The meat, poultry, and fish subgroup fell 1.5 percent, with the largest contributions coming from ham (down 9.1 percent) and sausages (down 6.9 percent). These falls were countered by higher lamb prices (up 8.9 percent), after a 9.6 percent fall in September due to discounting.

For the year to October 2011 food prices increased 1.1 percent, compared with 4.7 percent for the year to September 2011. "The annual increase in food prices of 1.1 percent no longer includes last year's increase in GST," Statistics NZ prices manager Chris Pike said.

In the year to October 2011, four of the five subgroups had price increases: grocery food (up 2.7 percent), restaurant meals and ready-to-eat food (up 2.6 percent), non-alcoholic beverages (up 4.6 percent), and meat, poultry, and fish (up 1.8 percent).

However, the fruit and vegetables subgroup decreased (down 8.8 percent). This was largely influenced by lower prices for vegetables (down 12 percent). Prices for tomatoes (down 29 percent), lettuce (down 35 percent), and broccoli (down 40 percent) accounted for about two-thirds of the decrease in vegetable prices.

The food price index (FPI) measures the rate of price change of food and food services purchased by households. Statistics NZ visits shops across New Zealand to collect prices for the FPI and check package sizes.