Poor seasons blamed for price rise

JASON KRUPP
Last updated 05:00 15/02/2013

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An apple a day may keep the doctor away, but you'll certainly be paying for the health benefits, according to the latest food price inflation figures.

Data released by Statistics New Zealand yesterday showed apple prices rose 21 per cent in January compared with a year ago, its highest level since December 2008.

And at $4.12 per kilogram, that outstripped an overall increase in food prices of 0.8 per cent for the January year.

Turners & Growers chief executive Geoff Hipkins said the sharp price jump was a result of a classic rise in overall demand for apples meeting a shortage of supply due to poor growing conditions in the northern hemisphere.

"It's an advantage to New Zealand, being able to supply apples while other countries have not been in that position," he said, adding that the warm summer had been helping apple farmers so far.

Kumara and avocados were the other fresh produce items burning holes in consumers' pockets.

Poor weather during the kumara planting and harvesting seasons caused prices to rise 98 per cent in the January year, and a seasonally low avocado crop saw prices rise 86 per cent.

Still, a glass of milk would have cost you almost 10 per cent less in January than it did a year ago, with international dairy prices trading well short of last year's February peak.

Month-on-month, the food price index rose 1.9 per cent, its first gain in five months and the single biggest monthly increase since July 2011.

ASB senior economist Jane Turner said consumers enjoyed the benefits of soft commodity prices at the till last year, but a moderate uptick in global economic activity was starting to affect food costs.

"Over the coming year we expect to see further, albeit modest, lifts in this area reflecting higher global commodity prices for grains and dairy," she said.

Last month's food price gains were led by fruit and vegetables, with prices 3.5 per cent higher than in December.

Grocery food prices rose 1.9 per cent, and meat, poultry and fish prices rose 2.2 per cent as supermarkets reduced discounting on lamb.

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- BusinessDay.co.nz

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