Food price rise highest since Oct 01

Food prices leapt another 1 per cent in May, driving the Food Price Index (FPI) up 6.8 per cent in the year to May, Statistics New Zealand said today.

That was the highest rise since October, 2001 when it jumped 7.7 per cent.

The May increase was mainly due to higher prices for fruit and vegetables (up 3.8 per cent), non-alcoholic beverages (up 2.6 per cent) and grocery food (up 0.5 per cent).

Over the year, grocery prices have jumped 11.8 per cent with fresh milk up 21.5 per cent, cheddar cheese up 59.4 per cent, bread up 13.9 per cent and butter up 80.1 per cent.

Fruit and vegetables were only up 2.5 per cent and meat, poultry and fish were only up 1.8 per cent.

When the FPI jumped at the end of 2001 milk and the meat, poultry and fish subgroup featured prominently (up 13 and 15 per cent respectively) although potatoes jumped 66 per cent.

SNZ has taken issue with a recent New Zealand Herald article which said grocery prices had risen 28 per cent in the year, saying the newspaper had not surveyed enough supermarkets and had not picked "best price" for most items as shoppers tend to do and as SNZ does.

The Reserve Bank has predicted annual inflation will jump from 3.4 per cent to an 18 year high of 4.7 per cent. The FPI makes up nearly 20 per cent of the Consumer Price Index.