Food prices fall in June on cheaper vegetables

New Zealand food prices fell in June, for a third monthly decline, with newly introduced seasonal adjustments showing cheaper vegetables helped drag down the index.

The food price index fell a seasonally adjusted 0.8 percent in June, adding to the 0.1 percent dip in May and a 0.5 percent decline in April, Statistics New Zealand said. The government agency adopted seasonal adjustment for the series for the first time, which aims to smooth the impact of seasonal events such as annual fruit and vegetable cycles. Food prices fell 0.1 percent on an annual basis.

On an unadjusted basis, food prices rose 0.5 percent in June, reflecting the impact of winter on vegetable prices.

"Higher food prices in June were influenced by seasonally higher prices for fresh fruit and vegetables," consumers price index delivery manager Matt Haigh said in a statement. "However, food prices fell 0.8 percent this month after adjusting for seasonal increases for items such as tomatoes and lettuce."

Food prices account for about a fifth of the broader CPI, which dropped below the Reserve Bank's 1 percent to 3 percent target range, rising at an annual pace of 0.1 percent in the year to March 31. Statistics NZ will publish second-quarter inflation data later this week, which the central bank expects will show consumers prices rose at a 0.3 percent annual pace.

Today's data show vegetable prices fell 3.9 percent in June, while fruit prices rose 1.3 percent. Meat and poultry prices were down 3.5 percent, while fish prices rose 0.9 percent.

Grocery food prices declined 0.4 percent, led by a 1.6 percent decline in other grocery food, while bread and cereals were down 1 percent and milk, cheese and eggs slipped 0.5 percent. Non-alcoholic beverage prices rose 0.6 percent, and restaurant meals and ready-to-eat food prices advanced 0.2 percent.

On an annual basis, fruit and vegetable prices rose 1.8 percent, while meat, poultry and fish prices fell 1.9 percent, grocery food prices dropped 2.1 percent, non-alcoholic beverages rose 4.1 percent, and restaurant meals and ready-to-eat food prices gained 1.9 percent. Bread prices showed the biggest annual decline, falling 8.7 percent, followed by a 7.9 percent fall in poultry prices, and a 6.7 percent drop in fresh milk prices.

(BusinessDesk)