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Food prices rise, butter hits record high

NZ Newswire logoNZ Newswire 12/09/2017 Sophie Boot

Butter © Food and Drink/REX/Shutterstock Butter New Zealand food prices rose in August, with fruit and vegetables, meat, and groceries such as butter more expensive than a year earlier.

Butter prices hit a record high of $5.39 per block, up 11 per cent in the month and 62 per cent from a year earlier.

The food price index advanced 0.2 per cent on a seasonally adjusted basis in the month, and gained 2.3 per cent for the year to August, Statistics New Zealand said.

Fruit and vegetables cost 5.5 per cent more than a year earlier, while meat, poultry and fish prices rose 0.6 per cent and grocery food prices increased 2.8 per cent.

The annual butter price increase is the largest in percentage terms since 2010, Stats NZ said. Chocolate prices also rose 3.4 per cent in the month.

"We have seen butter prices rising lately due to New Zealand's export driven market," consumers price index manager Matthew Haigh said.

"Butter prices have experienced all-time highs in the global market, and this also drives the price here at home."

Food prices account for about 19 per cent of the consumers price index, which is the Reserve Bank's mandated inflation target when setting interest rates.

Vegetable prices increased 8.7 per cent on an annual basis, driven by higher prices for kumara, potatoes and cucumbers, and were up 5.4 per cent in the month. Fruit prices rose 0.3 per cent annually, but dropped 0.5 per cent in the month, as avocados and strawberries became cheaper in August.

The price of chicken rose 3.3 per cent in the year to August 2017, but dropped 2.4 per cent in the month, while beef fell 2.6 per cent annually and was down 2.5 per cent on a monthly basis and pork dropped 8.6 per cent in the year.

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