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NZ food prices jump in August

NZ NewswireNZ Newswire 12/09/2016 Paul McBeth

Food prices have risen © Getty Food prices have risen New Zealand food prices posted their biggest monthly increase in at least three years in August as produce and grocery items got more expensive.

Food price increased a seasonally adjusted 1.2 per cent in August, snapping three months of cheaper goods, and led higher by a 1.7 per cent rise in fruit and vegetable prices, Statistics New Zealand said.

The monthly spike in produce prices was driven by seasonally higher prices for tomatoes, lettuce and cabbage, while banana prices climbed 22 per cent to a record high.

Grocery food prices also rose a seasonally adjusted 1.2 per cent as cheese and snack foods got more expensive.

On an unadjusted basis, food prices advanced 0.5 per cent in August from the same month a year earlier, the biggest annual increase since April, as dearer capsicums, onions and courgettes lifted vegetable prices 2.6 per cent and restaurant and ready-to-eat meal prices rose 2 per cent.

Grocery food was cheaper than August 2015, falling 0.5 per cent as the slump in global dairy prices helped push down the price of domestic fresh milk and yoghurt.

Woolworths-owned Countdown said prices for its most commonly bought items fell 0.6 per cent in August from the same month a year earlier due to cheaper milk prices.

Bad weather created shortages for produce which pushed up prices, while the spike in banana prices came when a ship transporting the fruit to New Zealand broke down leaving a temporary gap in supply, the supermarket operator said.

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

Tuesday's data show meat, poultry and fish prices fell 0.2 per cent in August from a year earlier, led lower by an 11 per cent drop in the price of poultry, while non-alcoholic beverage prices were unchanged from August 2015.

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