Food prices in July 2011
Food prices were up 2.0 percent in July 2011. This follows price rises of 1.4 percent and 0.5 percent in June and May 2011, respectively. The 2.0 percent increase in the food price index (FPI) is the largest since a 2.1 percent rise in the January 2010 month (other than the 2.2 percent rise in the October 2010 month, when goods and services tax (GST) increased).
In July 2011, the fruit and vegetables subgroup rose strongly, up 8.9 percent, reflecting seasonal rises in vegetable prices. Higher prices were also recorded for the meat, poultry, and fish (up 3.7 percent), and grocery food (up 0.5 percent) subgroups.
Prices in the restaurant meals and ready-to-eat-food subgroup were unchanged, while non-alcoholic beverage prices fell slightly (down 0.2 percent).
The most significant individual upward contribution came from higher prices for tomatoes (up 34.0 percent). Higher prices were also recorded for lettuce (up 20.7 percent), fresh chicken (up 8.6 percent), broccoli (up 66.6 percent), yoghurt (up 14.7 percent), and capsicums (up 28.6 percent).
The most significant downward contribution came from seasonally lower prices for nectarines (down 38.4 percent).
| Food price index subgroups: July 2011 |
| Subgroup |
Index points contribution to FPI |
Monthly percentage change |
Fruit and vegetables
Meat, poultry, and fish
Grocery food
Non-alcoholic beverages
Restaurant meals and ready-to-eat food |
15.80
7.31
2.50
-0.36
0.09 |
8.9
3.7
0.5
-0.2
0.0 |
| Food price index |
25.35 |
2.0 |
| Note: Index points contributions may not sum to total due to rounding. |
Annual movements
In the year to July 2011, food prices increased 7.9 percent. This is the sixth consecutive month in which the annual percentage increase for the FPI is higher than it was in the preceding month. The latest annual increase includes a 2.2 percent rise in food prices in October 2010, when the rate of GST rose from 12.5 to 15 percent. The latest rise is the largest since an 8.4 percent increase in the year to July 2009.
All five subgroups made upward contributions to the latest annual increase:
- grocery food (up 7.2 percent)
- fruit and vegetables (up 15.9 percent)
- meat, poultry, and fish (up 6.8 percent)
- non-alcoholic beverages (up 9.0 percent)
- restaurant meals and ready-to-eat food (up 4.2 percent).
The most significant upward contributions came from higher prices for tomatoes (up 52.2 percent) and lettuce (up 54.4 percent).
| Food price index subgroups: year to July 2011 |
| Subgroup |
Index points contribution to FPI |
Percentage change from July 2010 |
Fruit and vegetables
Meat, poultry, and fish
Grocery food
Non-alcoholic beverages
Restaurant meals and ready-to-eat food |
26.97
13.46
32.82
11.04
10.34 |
15.9
6.8
7.2
9.0
4.2 |
| Food price index |
94.64 |
7.9 |
| Note: Index points contributions may not sum to total due to rounding. |
Fruit and vegetables
Prices for the fruit and vegetables subgroup increased 8.9 percent in July 2011, following increases of 12.2 percent and 1.6 percent in June and May 2011, respectively. Higher vegetable prices (up 14.2 percent) accounted for more than half of the 2.0 percent rise to the July 2011 FPI, while fruit prices increased 0.2 percent. Vegetable prices typically rise during the winter months.
In the July 2011 month, the most significant upward contribution came from higher prices for tomatoes (up 34.0 percent). Prices for lettuce (up 20.7 percent), broccoli (up 66.6 percent), capsicums (up 28.6 percent), and cucumber (up 20.7 percent) also increased. Broccoli prices usually increase in June and July, and in July 2011 recorded their largest monthly increase since a 71.7 percent increase in June 2006. Tomato prices – which are collected weekly – were at their highest in early to mid July 2011. Prices averaged $13.25/kg during July.
Prices for tomatoes and capsicum were influenced by lower than usual imports from Australia following floods in Queensland earlier in 2011. A 110 percent rise in tomato prices from May to July 2011 compares with an increase of 65 percent over the same period last year.
The most significant downward contribution came from seasonally lower prices for nectarines (down 38.4 percent).
For the year to July 2011, fruit and vegetable prices increased 15.9 percent. The most significant individual upward contributions came from higher prices for tomatoes (up 52.2 percent) and lettuce (up 54.4 percent). Higher prices were also recorded for capsicums (up 47.3 percent), broccoli (up 39.2 percent), and potatoes (up 10.1 percent).
Meat, poultry, and fish
Prices for the meat, poultry, and fish subgroup rose 3.7 percent, following a 3.2 percent fall in June 2011 and a 1.2 percent rise in May 2011.
The July increase in meat, poultry, and fish prices is the largest since a 3.7 percent increase in September 2008.
Meat and poultry prices rose 3.9 percent, while fish prices rose 2.3 percent. Within meat and poultry, prices rose for:
- poultry (up 6.1 percent)
- processed meat (up 3.2 percent)
- lamb (up 7.7 percent)
- pork (up 6.8 percent)
- beef (up 1.0 percent).
The largest individual contributors were fresh chicken (up 8.6 percent), sausages (up 6.6 percent), and lamb chops (up 6.9 percent). A reduced level of discounting contributed to these higher prices.
For the year to July 2011, meat, poultry, and fish prices increased 6.8 percent. The most significant upward contributions came from higher prices for beef (up 9.5 percent), lamb (up 23.9 percent), and poultry (up 6.8 percent).
Other subgroups
In July 2011, grocery food prices rose 0.5 percent and restaurant meals and ready-to-eat food prices were unchanged.
The non-alcoholic beverages subgroup was the only subgroup to fall, by 0.2 percent.
Within these subgroups, the most significant upward contributions came from higher prices for yoghurt (up 14.7 percent) and cakes and biscuits (up 2.5 percent). Yoghurt prices reached their highest recorded level in July 2011, partly influenced by a reduced level of discounting.
Lower prices were recorded for muesli bars (down 8.5 percent) and soft drinks (down 1.3 percent).
For the year to July 2011, prices for grocery food rose 7.2 percent, non-alcoholic beverages increased 9.0 percent, and restaurant meals and ready-to-eat food were up 4.2 percent.
Within these subgroups, the most significant individual upward contributions came from higher prices for soft drinks (up 6.4 percent).
Distribution of item-level movements
The table below outlines the distribution of price movements in June and July 2011. The food price index (FPI) is partitioned into those national item-level indexes that increased, showed no change, or decreased.
| Distribution of item-level index movements |
| National item-level index movements |
May to Jun 2011 |
Jun to Jul 2011 |
| Increase in price |
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Weighted average price increase (percent) |
91
58.0
65.3
35.7
4.4 |
96
59.6
56.1
37.3
5.2 |
| No change in price |
Number of items
Percentage of all items
Percentage of expenditure weight |
2
1.3
1.1 |
6
3.7
3.9 |
| Decrease in price |
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Weighted average price decrease (percent) |
64
40.8
33.7
-17.7
4.2 |
59
36.6
40.0
-11.9
2.3 |
| Note: The FPI basket of items was updated in July 2011, with the number of items rising to 161. The number of items in the basket was 157 up to June 2011. |
The distribution of item-level movements shows that for July 2011, compared with June 2011:
- the percentage of expenditure weight of items that decreased in price rose, while the percentage expenditure weight of items that increased in price fell
- the weighted average price increase rose, while the weighted average price decrease fell strongly
- the weighted average price increase for July is much larger than the weighted average price decrease.
This led to a 2.0 percent rise for the July 2011 FPI, following a 1.4 percent rise in June 2011.
The graph above shows the impact of the items that rose and fell in price. Compared with June 2011, the impact of the items that rose in price in July 2011 was greater, and the impact of items that fell in price was smaller.
For technical information contact:
Andrea Irsevic or Daniel Griffiths
Wellington 04 931 4600
Email: info@stats.govt.nz
Food price index review
We have reviewed the FPI, as part of a wider, three-yearly consumers price index (CPI) review. We updated the basket of representative food items being tracked for the FPI and reviewed the relative importance of food items in the basket.
The new relative importance of the FPI subgroups shows that about $38 of every $100 households spend on food, is spent on grocery food. About $21 is spent on eating out or takeaways, and about $16 is spent on meat, poultry, and fish. Fruit and vegetables account for $14, and the remaining $11 is spent on non-alcoholic beverages, such as packaged coffee, soft drinks, and juices.
Four items have been added to the FPI basket and none have been removed, taking the number of items in the basket to 161. The items added to the basket are:
- dried apricots
- frozen berries
- frozen chicken nuggets
- flatbread.
During the review, we sought feedback from users on the content of the FPI information release. This resulted in a new table – table 4 – being added. This table gives the contribution of FPI subgroups, classes, and selected sections to the overall change in the FPI index number. The tables previously numbered as tables 4 and 5 are now numbered as tables 5 and 6.
See Food price index review: 2011 for details of the review.
The CPI review
An information paper on the CPI review, including new expenditure weights and details of basket changes, will be published on 10 October 2011. The first reweighted CPI, for the September 2011 quarter, will be published on 25 October 2011.
For more information contact:
Peter Campion or Daniel Griffiths
Wellington 04 931 4600
Email: info@stats.govt.nz
Next release...
Food Price Index: August 2011 will be released on 13 September 2011.