New Zealand food prices fell in December, with vegetables, meat and dairy cheaper, although fruit became more expensive in the first official month of summer.
Food prices slipped 0.5 per cent in the month on a seasonally adjusted basis, after rising slightly in November and being unchanged in October, Statistics New Zealand said. On an unadjusted basis, food prices dropped 0.8 per cent in the month, with December the cheapest month for broccoli, cabbage and cauliflower in the past five years.
Vegetable prices dropped 1.6 per cent in the month, while fruit rose 2.6 per cent, with the price of oranges up 19.2 per cent and citrus fruits up 11 per cent overall.
Grocery items, which account for more than a third of food prices, fell 0.9 per cent, with yoghurt down 2.6 per cent and bread falling 1.2 per cent. Meat, poultry and fish prices declined 1.5 per cent, while non-alcoholic beverage prices dropped 3.1 per cent.
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. Today's data showed food prices rose 0.6 per cent in the year through December, reflecting higher prices for vegetables and dairy. On an annual basis, milk rose 6.1 per cent to $3.32 for two litres, while butter rose 34 per cent to $4.12 per 500 gram block.
The CPI increased at a 0.4 per cent annual pace in the September quarter, the eighth straight quarter below the Reserve Bank's 1-to-3 per cent target band. The CPI for the December quarter will be released next week, which the Reserve Bank expects will show inflation returned back within the target band.