A seasonal drop in vegetable prices is largely responsible for food prices falling 0.1% in August from July. The fall follows increases of 1.6% and 1.3% in July and June, respectively.
Statistics New Zealand said the price of tomatoes dropped by 17.9%, and cucumbers 20.9%, nectarines 24.8%, The price of potatoes also fell, 7.4%.
But cheaper vegetables were offset by higher grocery food 0.6%, poultry 0.8%, and non-alcoholic beverage prices 0.9%.
The items with the highest rise in price included fresh chicken, up 9.1%, yoghurt up 5.2%, and minced beef up 5%.
Statistics NZ said vegetable prices usually fall in August following strong seasonal increases in the June and July winter months.
Lower vegetable prices accounted for nearly all of the 3.7% fall in the fruit and vegetables subgroup in August.
Food prices fell 0.2% for the year to August. This is the fourth consecutive month of annual falls in food prices, which has not occurred since May 2000.
In the year to August 2010, fruit and vegetable prices fell 4.7%, while meat, poultry, and fish prices fell 1.6%. These falls were partly offset by prices rises for grocery food (up 1.2%) and restaurant meals and ready-to-eat food, up 1.8%.