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Wet autumn leads to food prices rise

NZ Newswire logoNZ Newswire 13/06/2017 Paul McBeth

New Zealand food prices rose at their fastest annual pace in more than six years as increasingly expensive vegetables were made more scarce by the wet autumn weather.

The food price index climbed an annual 3.1 per cent in the year ended May 31, the biggest annual increase since September 2011 when prices were artificially boosted by the hike in GST to 15 per cent, Statistics New Zealand said.

Food prices rose a seasonally adjusted 1.6 per cent in May, the biggest monthly increase in at least three years as vegetable prices jumped 11 per cent in the month.

"Our wet autumn has pushed vegetable prices to their highest level in almost six years in May, with the largest annual increase to vegetables on record," consumer prices manager Matthew Haigh said in a statement.

"The increase was more pronounced because warmer than usual weather in the 2016 growing season resulted in cheaper than usual vegetable prices in May last year."

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.

Annual inflation rose to 2.2 per cent in the first three months of the year, well above the central bank's forecast of 1.5 per cent.

Wednesday's figures show vegetable prices jumped 31 per cent in May from the same month a year earlier, with broccoli and kumara prices more than doubling, lettuce prices up 76 per cent, and tomatoes rising 34 per cent.

Stats NZ said the annual increase in vegetable prices was the biggest since the series began. Over the same period, fruit prices fell 5.7 per cent.

Meat, poultry and fish prices rose 2.3 per cent in May while grocery food prices were up 1.9 per cent in the month.

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