New Zealand food prices may have lifted 0.5 per cent overall in the year to June, but tomatoes are at record lows.

Tomato prices decreased 17 per cent, hitting their lowest price ever for a June month. The price of a 200-gram avocado also fell to $2.99 in June 2019, 31 per cent cheaper than in June last year.

Overall prices were, however, bolstered by higher prices for restaurant meals and ready-to-eat food.

Restaurant meals and ready-to-eat food prices climbed 3.4 per cent in June from a year earlier, while meat, poultry and fish prices rose 2.8 per cent and grocery food prices increased 1.8 per cent.

Advertisement

Food prices fell 0.7 per cent during the month, weighed by lower prices for cakes and biscuits, Stats NZ said. After seasonal adjustment the price change remained at 0.7 per cent.

"A number of specials on biscuits sent June prices crumbling," consumer prices manager Gael Price said. Overall, June cake and biscuit prices fell 3.7 per cent from May.

Also contributing to lower food prices in June were declines in prices for yoghurt, down 9.1 per cent, cheese, down 4.3 per cent, and butter, down 1.9 per cent. These drops were partly offset by higher prices for chocolate and eggs, Stats NZ said.

Fruit and vegetable prices fell 2.1 per cent on the month and grocery food prices fell 0.7 per cent.

The food price index accounts for about a fifth of the consumers price index, which is one measure the Reserve Bank uses to pursue its inflation target when setting interest rates.

Rates are currently at a record low 1.50 per cent and investors are currently expecting two more 25 basis point rate cuts over the next few months given that annual inflation remains a tepid 1.5 per cent.

Separately, Stats NZ's new measure of rental price inflation remained steady in June.

It draws on Ministry of Business, Innovation and Employment tenancy bond data, replacing a quarterly survey of landlords, and will also feed into the CPI.

Advertisement

The 'stock' measure shows rental price changes across the entire renting population, whereas the 'flow' measure only captures dwellings that have a new bond lodged against them.

The national stock rental price index for June rose 3.3 per cent from the same month a year earlier, following annual increases of 3.4 per cent in both April and May. It rose 0.2 per cent in June from May.

On the flow basis, rental prices rose 3.9 per cent on the year in June after also lifting 3.9 per cent in May. It was down 0.1 per cent on the month.

- BusinessDesk