Cheaper fruit and veggies drive first food prices fall since February 2022

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Photo: RNZ / Richard Tindiller

Food price inflation has slowed to its lowest level in nearly a year as fruit and vegetable prices ease.

Stats NZ’s food price index rose 9.6 percent in the year ended July – the lowest annual rate since September last year.

The main drivers over the year were a 11.9 percent rise in grocery prices, and 8.9 percent lift for takeaway and restaurant meals.

The annual rise in fruit and vegetables prices slowed to 6.2 percent, while meat, poultry, and fish prices increased 9.3 percent, and non-alcoholic drinks prices rose 9.1 percent.

“While overall food inflation has slowed, it is comparable to the increases we saw in 2008 and 2011,” Stats NZ consumer prices manager James Mitchell said.

More expensive eggs, potato crisps, and yoghurt were standout items in the grocery price rise.

The increasing cost of takeaway meals, drinks, and dining in restaurants drove the 8.9 percent increase in that category, making it the second biggest driver of food inflation.

For the month of July, prices fell 0.5 percent – the first monthly drop since February last year, and the biggest decline since November 2021.

A 4.1 percent fall in fruit and vegetables, such as tomatoes, avocadoes, and oranges, were the big drivers in lower prices for the month.

There were smaller falls in meat, poultry and soft drinks, which offset higher grocery and takeaway foods prices.

Food prices make up about 19 percent of the overall consumer price index.