Soaring chocolate and olive oil prices push annual food price inflation up

Chocolate prices have soared 20% in the past year. Photo / 123rf

Spikes in the chocolate and olive oil prices offset cheaper fruit and vegetables to push annual food price inflation up slightly in August.

Olive oil, chocolate, butter, and takeaway meals drove an overall food price increase of 0.4% for the year to August 31, Stats NZ said today.

“The average price of a 250g block of chocolate has increased 20% since this time last year,” Stats NZ consumer prices manager James Mitchell said.

Fresh fruit and vegetable prices kept falling, down 12%. Falling kūmara, potatoes, and lettuce prices led the way. Potatoes are now the cheapest they’ve been in three years.

“The average price of 1kg of potatoes in August 2024 was $2.18. This is the cheapest recorded since 2021,” Mitchell said.

Kūmara and potato prices were coming down from near-record-high levels in 2023. In the 12 months to August, the price of kūmara fell 53.9%, while the price of potatoes fell 26.6%.

While prices for restaurant meals and ready-to-eat food (including takeaways) rose 3.6% for the year, there were signs that they were stabilising.

On a monthly basis, the category rose just 0.2%

ASB economists noted the data showed inflation broadly continuing to ease.

New Zealand consumer prices rose by 0.3% in August, with the 1.1% annual change the lowest since 2016, said senior economist Mark Smith.

“Lower prices for fuel and a seasonal dip for airfares and accommodation helped to push overall monthly prices down in August despite a seasonal jump for food prices,” he said.

“The moderating annual inflation impulse increases our confidence that annual Consumer Price Index inflation will fall below 2.5% in [third quarter] of this year.

The Stats NZ Selected Price Index (SPI) showed transport costs falling.

Prices for petrol, diesel, and airfares were all cheaper in August than they were in July.

In August, petrol prices fell 1.7% while diesel prices fell 2.8%. The 1.7% decrease in petrol prices follows a 0.5% decrease in July.

“Petrol prices fell in all centres we collect prices for in New Zealand, except for Whangārei, which recorded a slight increase in August,” Mitchell said.

“The decrease in August was much more widespread than in July, when only Auckland recorded a decrease, due to the ending of the Auckland regional fuel tax.”

Global oil prices have fallen steadily since July.

In August, domestic air transport prices fell 0.8% while international air transport prices fell 2%. On an annual basis, domestic and international flights were down 8.5% and 7.2% respectively.

Rental prices also continued to stabilise. Although the stock measure of rental pricing showed a 4.3% increase for the year, it rose just 0.3% in August.

The flow measure (which captures new lease agreements) showed just a 1.4% annual rise and a fall of 0.1% for August.

ANZ senior economist Miles Workman described the data as showing that “gradual disinflation continues”.

“Overall, the SPI came in mildly higher than our expectations, but not quite enough to fully offset pre-existing downside risks to our third quarter CPI forecast of 1% [quarter on quarter],” he said.

Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003. To sign up to his weekly newsletter, click on your user profile at nzherald.co.nz and select “My newsletters”. For a step-by-step guide, click here.