Food prices up 2.9% in year to December, after 1.9% annual growth in November, Stats NZ says

Food prices up 2.9% in year to December, after 1.9% annual growth in November, Stats NZ says

Food prices in December 2011 were 2.9% higher than in December 2010, with most food groups recording rises over the year, figures released by Statistics New Zealand show.

The annual growth was higher than 1.9% growth in the year to November 2011, and 1.1% in the year to October 2011. In 2011, annual food price growth peaked at 7.9% in July, which included an approximate 2.2% boost from the October 2010 GST increase.

In the December month food prices rose 0.2% from November, Stats NZ said.

Here is the reaction from ASB economist Christina Leung:

Food prices increased 0.2% over December, in line with our expectations. Underpinning the increase was a modest recovery in fruit and vegetable prices. This series is typically volatile reflecting the effects of weather conditions on crop yields. The 2.5% increase in fruit and vegetable prices follows some sharp declines in recent months as prices fell back from the high levels seen around the middle of 2011.

Meat prices also increased, as higher international prices flow through to the retail level here in NZ. Meanwhile, there was another small increase in restaurant and takeaways prices. Given labour is a key input cost in this component, we expect further increases over the coming year.

Offsetting these increases was a decline in the price of grocery foods and non-alcoholic beverages. There has been a moderation in grocery food price inflation in recent months, reflecting the easing in global commodity prices

Implications

The results indicate food price inflation remain relatively subdued, with the 2.9% increase in food prices over the past year well below the double-digit annual price growth seen over late 2008. The December food price result is in line with our forecast, and we expect the release of CPI on Thursday will show a 0.2% increase for Q4.

(Updates with ASB comment)

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Ohhh dear - The emergency rate 2.5% OCR is becoming an increasingly unfunny joke for those who remain solvent.- but not for much longer. The beneficiaries of this undue RBNZ largesse should be publicly labelled so we can exact our retribution  

What's the actual crime here tough guy?
What sort of thing did you have in mind re: retribution?

The crime is called covert default - and it is weakening my liquidity daily.
The retribution is already underway with the issuance of covered bonds.
Mortgage holder liabilty is being corralled and transfered to new owners in Europe - These owners, presumably banks, will have little pity and complete exemption from the law to tip the borrowers from their abodes if and when the time comes.
Witness the loss of MF Global customer's money. One minute it is yours next JP Morgan's apparently. 

Increasing the OCr will have no impact on rising food, power & petrol prices .... 
So, relax & enjoy the low interest rates likely to be on offer for a while yet.

How can I enjoy low interest rates when others are abusing my capital at my expense? I have no debts to deflate in a rising cost environment.

Go and buy a couple of oz of gold, and a stack of silver.  It's like painkillers for inflation.