Food prices post record monthly fall

Food prices fell by 0.9 percent in August from July, 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 drop in the food price index, Statistics New Zealand (SNZ) said today.

In August grocery food prices fell 1.3 percent, with 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, SNZ said.

Fruit and vegetable prices dropped 3.3 percent, driven by a 10 percent fall in tomato prices, a 21 percent drop for strawberries, broccoli down 21.8 percent, and avocados down 25 percent.

For the year to August, food prices rose 4.6 percent, the smallest annual increase since January 2008.

Four subgroups recorded increases for the year, with 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, the first annual fall since February 2008, SNZ said.

The most significant downward contribution came from a 15.9 percent fall in the price of lettuce, which was particularly high in August 2008 due to unusually wet weather.

NZPA