Food prices continue to fall - fruit and veges lead the way with record decrease

Monthly food prices fell 0.5 per cent in March, compared with February, driven by cheaper kūmara, apples and grapes. Photo / 123RF

Inflation may still be too high but at least food prices continue to fall.

Monthly food prices fell 0.5 per cent in March 2024 compared with the previous month.

The biggest contributor to the monthly fall was fruit and vegetables, driven by cheaper prices for kūmara, apples and grapes.

Fruit and vegetables were down 3.8 per cent for the month. Across the past 12 months, they were down 13.3 per cent.

“The annual decrease in fruit and vegetable prices was the largest recorded since the series began in 1999,” Stats NZ consumer prices manager James Mitchell said.

“This was driven by cheaper prices for tomatoes, lettuce and avocados.”

The meat, poultry and fish groups also contributed to lower food prices, driven by cheaper lamb, beef steaks and bacon.

The category dipped 0.1 per cent for the month. Across the year, it rose just 0.2 per cent.

Grocery food was up just 0.1 per cent for the month and 1.7 per cent across 12 months.

The total food category rose 0.7 per cent across 12 months, a significantly smaller rise than topline consumer price inflation (CPI), currently sitting at 4.7 per cent.

The total food group figure was boosted by continued high levels of inflation for takeaways (ready to eat) and restaurant meals - up 6.4 per cent across the 12 months.

The monthly data, called the Selected Price Index, now includes accommodation and travel costs, as well as food – representing about 40 per cent of the full CPI figure, released quarterly.

The results of this were less promising as we wait for the full CPI figure next week.

They showed petrol prices rose 14.6 per cent in the past 12 months and rental prices rose about 5 per cent.

“Consumer prices were flat in March, which was slightly weaker than expected,” said ASB senior economist Mark Smith.

“This data highlights that while inflationary pressures are generally receding, it remains much too soon to declare mission accomplished,” Smith said. “OCR cuts are unlikely to be delivered until at least November.”

If you have a burning question about the quirks or intricacies of economics send it to liam.dann@nzherald.co.nz ... or leave a message in the comments section.

Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist. He also presents and produces videos and podcasts and is the author of the best-selling book BBQ Economics. He joined the Herald in 2003.