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NZ food prices rise 0.8pc in February

NZN 12/03/2017 Paul McBeth

New Zealand food prices rose in February on more expensive fruit and vegetables as the end of summer drove up prices for strawberries and lettuce.

The food price index increased a seasonally adjusted 0.8 per cent last month, and was 2.2 per cent higher than in February 2016, its biggest annual increase since December 2011, Statistics New Zealand said.

On an unadjusted basis, food prices rose 0.2 per cent in the month.

Fruit and vegetable prices rose a seasonally adjusted 4.5 per cent led by more expensive strawberries and bananas, while apple prices fell from the spike in January when the fruit was in short supply.

Grocery food prices, which account for more than a third of the index, rose a seasonally adjusted 0.2 per cent in the month, led by higher prices for butter, yoghurt and cheese.

More expensive dairy products drove the annual increase in food prices, with grocery items 2.3 per cent higher than February 2016, with fresh milk prices up 6.1 per cent, yoghurt up 9.2 per cent, cheese rising 6 per cent and other milk product prices climbing 6.7 per cent.

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.

The central bank expects inflation to accelerate to a 1.5 per cent annual pace in the first quarter, having returned to within its 1 per cent-to-3 per cent target band for the first time in two years in the fourth quarter.

Prices for meat, poultry and fish products fell 1.5 per cent in February and were down 2 per cent from a year earlier.

Beef and veal prices were the only subgroup to rise on an annual basis, up 1 per cent from February 2016, while the glut of chicken in the domestic market pushed prices down 9.6 per cent.

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