Food prices have smallest annual price increase in nearly six years

Poultry prices had a u-turn, helping dramatically slow food price inflation. Photo / 123RF

Food price inflation has slowed, rising overall by 0.2 per cent in the year to May 31, with fruit and vegetable prices falling as the country gradually recovered from Cyclone Gabrielle.

Stats NZ today said cheaper prices for meat, poultry and fish also helped slow down overall food price hikes.

The May food price data was a significant change from the 0.8 per cent annual increase recorded just a month ago.

The 0.2 per cent increase was the smallest since September 2018.

Stats NZ said fruit and vegetable prices fell 11.4 per cent over the year.

Meat, poultry and fish prices were down 1.2 per cent in the year.

”Prices for meat, poultry, and fish recorded an annual decrease for the first time in over three years,” Stats NZ consumer prices manager James Mitchell said today.

”The decrease was driven by cheaper prices for lamb chops, legs of lamb, and chicken pieces.”

ANZ economists had been expecting food prices to fall 0.4 per cent year-on-year.

“Fresh produce prices continued to unwind the cyclone-related premium, while grocery prices partially unwound last month’s strength,” the bank economists said after the Stats NZ selected price indexes data release.

The data also showed restaurant and ready-to-eat meal prices rose just 0.1 per cent month-on-month, which ANZ said was unusually weak, especially considering an April minimum wage increase.

ANZ said the new data included some volatile components and there was a “risk of payback” next month.

Rental prices were up 4.6 per cent year-on-year and 0.3 per cent month-on-month.

Prices for alcoholic beverages were up 4.4 per cent over the year. Cigarettes and tobacco were up 10.2 per cent.

Despite their modest increase in May, prices for restaurant meals and ready-to-eat food were up 4.8 per cent over the year.