Butter hits record high price on global demand
A spike in food prices and a recovery in oil prices earlier this year led to a jump in inflation.
New Zealand food prices rose in August, with fruit and vegetables, meat, and groceries such as butter more expensive than a year earlier.
The food price index advanced 0.2% on a seasonally adjusted basis in the month, and gained 2.3% for the year to August, Statistics NZ said. Fruit and vegetables cost 5.5% more than a year earlier, while meat, poultry and fish prices rose 0.6% and grocery food prices increased 2.8%.
Butter prices hit a record high of $5.39 per block, up 11% in the month and 62% from a year earlier. The annual butter price increase is the largest in%age terms since 2010, Statistics NZ said. Chocolate prices also rose 3.4% 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% of the consumers price index, which is the Reserve Bank's mandated inflation target when setting interest rates. A spike in food prices and a recovery in oil prices earlier this year led to a jump in inflation, which has been subdued in recent years. However, as those movements flatten out, the pace of CPI increase is expected to slow in early 2018, the Reserve Bank has said.
Vegetable prices increased 8.7% on an annual basis, driven by higher prices for kumara, potatoes and cucumbers, and were up 5.4% in the month. Fruit prices rose 0.3% annually, but dropped 0.5% in the month, as avocados and strawberries became cheaper in August.
The price of chicken rose 3.3% in the year to August 2017, but dropped 2.4% in the month, while beef fell 2.6% annually and was down 2.5% on a monthly basis and pork dropped 8.6% in the year. Restaurant meals and ready-to-eat food prices rose 2.3% on an annual basis.
(BusinessDesk)
Sophie Boot
Wed, 13 Sep 2017
Wed, 13 Sep 2017
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Butter hits record high price on global demand
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