Food prices unchanged in August

11.10am

The Food Price Index was unchanged in August, Statistics New Zealand said today.

The index is up just 0.4 per cent for the year to August against economists' forecasts of 0.8 per cent.

The Reserve Bank has lifted interest rates five times this year and is threatening two more hikes because of fears inflation will lift outside its 1-3 per cent target next year. But there is little evidence of inflation in food and grocery prices.

The index, which makes up 18 per cent of the Consumer Price Index, has not registered a rise in any of the past five months and four of those months have posted a fall in prices.

In August, higher prices for grocery food, soft drinks, confectionery, restaurant meals and ready-to-eat food were offset by lower prices for meat, fish, poultry, fruit and vegetables.

Grocery food, soft drinks and confectionery prices increased by 0.3 per cent in August. Significant upward contributions came from higher prices for chocolates (up 11.6 per cent) and coffee (up 6.2 per cent), while significant downward contributions came from lower prices for energy drinks (down 5.7 per cent) and chocolate biscuits (down 4.9 per cent).

Restaurant meals and ready-to-eat food prices increased by 0.1 per cent in August. Ready-to-eat food prices rose 0.2 per cent and restaurant meal prices fell by 0.1 per cent.

Meat, fish and poultry prices fell 0.5 per cent in August with poultry down 2.3 per cent and beef down 1.3 per cent. Against that, bacon rose 2.2 per cent.

Fruit and vegetables prices fell 0.7 per cent in August with downward contributions from lower prices for broccoli (down 19.1 per cent) and tomatoes (down 10.6 per cent). The most significant upward contribution came from higher prices for bananas (up 21.7 per cent).

- NZPA