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Prices for milk, cheese and eggs increased 6.7% in the year to March, reflecting the global increase in dairy prices, ASB economist Christine Leung said yesterday.
Statistics New Zealand figures showed food prices overall fell 0.3% in March, broadly in line with expectations, producing an annual growth figure of 1.2%.
Prices of fruit and vegetables and meat were stronger than expected but were largely offset by an unexpected fall in grocery prices, she said.
Recent Global Dairy Trade auctions showed an easing in global dairy prices, suggesting further price falls at the retail level in coming months.
The increase in meat prices was driven by higher beef and lamb prices in March. However, global lamb and beef prices have eased since late last year, as the Australian drought prompted farmers to bring forward livestock slaughter.