2011 food prices rise 2.9%

Food prices rose 0.2% in December to give an annual food price increase of 2.9%, Statistics New Zealand figures released yesterday showed.

Underpinning the rise was a modest recovery in fruit and vegetable prices.

ASB economist Christina Leung said the series was typically volatile, reflecting the effects of weather conditions and crop yields.

The 2.5% increase in fruit and vegetable prices followed some sharp falls in recent months as prices fell back from the higher levels seen in the middle of last year.

Meat prices also rose as higher international prices lifted national retail prices.

There was also a small lift in restaurant and takeaways prices.

"Given labour is a key input cost in this component, we expect further increases over the coming year," Ms Leung said.

Offsetting those rises was a fall in grocery food prices and non-alcoholic drinks. There had been easing in grocery food price inflation in recent months, reflecting easing in global commodity prices, she said.

The results indicated food price inflation remained "relatively subdued" and well below the double-digit growth of late 2008.

 

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