New Zealand food prices fell in September, as cheaper cheese and seasonal fruit and vegetables offset rising meat prices.
The food price index fell 0.8 percent last month, after rising 0.3 percent in August, according to Statistics New Zealand. The index was 0.1 percent lower than it was in September 2013, as supermarket discounting of bread led to cheaper groceries.
The cost of food makes up about 19 percent of the broader consumer price index, a measure of inflation in the economy, compiled by the national statistician. Figures for the September quarter are due this month, and will be watched closely for any sign of inflationary pressure, after softer than expected readings earlier this year. Slower than expected inflation figures saw Reserve Bank governor Graeme Wheeler keep the official cash rate on hold at 3.5 percent in September, after hiking them 100 basis points since March.
"Over the past year, food prices have largely remained flat," Christina Leung, an economist at ASB Bank, said in a note. "The result adds to other inflation indicators pointing to a contained inflation environment. With little urgency for the RBNZ to resume its tightening cycle, we continue to expect the RBNZ will keep the OCR on hold at 3.5 percent until March 2015."
September food prices weakened from August as fruit and vegetable prices fell 6.5 percent, with vegetables dropping 11 percent led by lettuce, tomatoes, cucumber and capsicum. Grocery food prices slipped 0.2 percent, as cheese prices fell 3.5 percent and pasta declined 3.4 percent.
