Food prices fell at their fastest monthly rate in three years in August, with prices down 0.9% from July, figures released by Statistics New Zealand (Stats NZ) show. Prices were still up 4.6% from a year ago, although this was less than the 8.4% year-on-year growth seen in July.

The 0.9% fall in August was the largest monthly fall since a 0.9% fall in February 2006. It followed rises of 0.6% in July and 2.8% in June. Monthly growth in August 2008 was 2.7%, although prices fell 0.1% in both August 2007 and 2006.

"In the August 2009 month, grocery food prices fell 1.3 percent," Stats NZ said.

"The biggest contributions came from lower prices for bread (down 2.7 percent), chocolate biscuits (down 6.3 percent), and cheddar cheese (down 6.2 percent). Prices for cheddar cheese, milk, and butter returned to levels last seen in late 2007 or early 2008," it said.

"Fruit and vegetable prices decreased 3.3 percent, driven by lower prices for tomatoes (down 10.0 percent), strawberries (down 21.7 percent), broccoli (down 21.8 percent), and avocados (down 25.0 percent)."

"For the year to August 2009, food prices rose 4.6 percent, which is the smallest annual increase since January 2008. Four subgroups recorded increases: grocery food (up 4.4 percent), meat, poultry and fish (up 9.2 percent), non-alcoholic beverages (up 7.9 percent), and restaurant meals and ready-to-eat food (up 3.7 percent)."

"The fruit and vegetables subgroup fell 1.1 percent in the year to August 2009, which is the first annual fall since February 2008. The most significant downward contribution came from lower prices for lettuce (down 15.9 percent), which were particularly high in August last year due to unusually wet weather."