Food prices in August 2008
Food prices rose 2.7 percent in August 2008, following increases of 0.6 percent and 1.3 percent in July and June 2008, respectively. This is the largest monthly increase since a 3.8 percent rise in July 1989, when the rate of GST increased from 10.0 to 12.5 percent. Within the last 30 years, the largest monthly increase was 10.0 percent in October 1986 when GST was introduced, followed by 5.9 percent in April 1979.
All five of the food subgroups increased in August 2008. The most significant upward contribution came from higher prices for the fruit and vegetables subgroup (up 9.6 percent), followed by grocery food (up 1.9 percent), meat, poultry and fish (up 2.6 percent), restaurant meals and ready-to-eat food (up 0.5 percent), and non-alcoholic beverages (up 0.3 percent).
The most significant individual upward contributions came from higher prices for lettuce (up 33.6 percent), tomatoes (up 42.8 percent), cakes and biscuits (up 8.0 percent), fresh milk (up 4.4 percent), and lamb chops (up 18.2 percent).
The most significant individual downward contribution came from lower prices for yoghurt (down 8.9 percent).
| Index Points Contribution |
| Subgroup |
June 2008 to
July 2008 |
July 2008 to
August 2008 |
Fruit and vegetables
Meat, poultry and fish
Grocery food
Non-alcoholic beverages
Restaurant meals and ready-to-eat food |
5.56
-1.92
1.97
0.50
1.58 |
15.37
4.76
8.40
0.29
1.31 |
| Food Price Index |
7.68 |
30.13 |
Note: Index points contributions may not sum to totals due to rounding.
Distribution of item-level movements
The table below outlines the distribution of price movements in July and August 2008. The Food Price Index (FPI) has been 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 |
June 2008 to
July 2008 |
July 2008 to
August 2008 |
| Increase in price |
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Weighted average price increase (percent) |
87
55.4
55.6
22.2
3.6 |
107
68.2
72.1
38.1
4.7 |
| No change in price |
Number of items
Percentage of all items
Percentage of expenditure weight |
0
0.0
0.0 |
0
0.0
0.0 |
| Decrease in price |
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Weighted average price decrease (percent) |
70
44.6
44.4
-14.5
2.9 |
50
31.9
27.9
-8.0
2.6 |
The distribution of item-level movements shows that:
- the percentage expenditure weight of items that increased in price rose strongly, while the percentage expenditure weight of items that decreased in price fell
- the weighted average price increase rose, while the weighted average price decrease fell slightly
- the percentage of expenditure weight of items that increased in price is significantly greater than the percentage of expenditure weight of items that decreased in price.
These movements resulted in a 2.7 percent increase in the August 2008 FPI, compared with a 0.6 percent increase in July 2008.
Annual movements
Food prices increased 10.6 percent in the year to August 2008, following increases of 7.6 percent and 8.2 percent in the years to July and June 2008, respectively. This is the highest annual increase since May 1990, when food prices increased 10.7 percent, which incorporates the increase of GST from 10.0 to 12.5 percent in the July 1989 month.
All five of the food subgroups increased in the year to August 2008. The most significant upward contribution came from higher prices for the grocery food subgroup (up 13.1 percent), followed by fruit and vegetables (up 19.1 percent), restaurant meals and ready-to-eat food (up 6.0 percent), meat, poultry and fish (up 5.8 percent), and non-alcoholic beverages (up 7.0 percent).
Within these subgroups, the most significant upward contributions came from higher prices for lettuce (up 145.3 percent), cheddar cheese (up 64.8 percent), bread (up 17.4 percent), fresh milk (up 12.5 percent), and butter (up 87.6 percent).
The most significant downward contribution came from lower prices for tomatoes (down 24.4 percent).
| Annual Index Points Contribution |
| Subgroup |
August 2007 to
August 2008 |
Grocery food
Meat, poultry and fish
Fruit and vegetables
Restaurant meals and ready-to-eat food
Non-alcoholic beverages |
50.89
27.90
14.40
10.13
6.73 |
| Food Price Index |
110.05 |
Note: Index points contributions may not sum to totals due to rounding.
Fruit and vegetables
Prices for the fruit and vegetables subgroup increased 9.6 percent in August 2008, following increases of 3.6 percent and 5.2 percent in July and June 2008, respectively. Vegetable prices increased 14.5 percent in August 2008, while fruit prices increased 0.8 percent. If vegetable prices had remained unchanged from July 2008, food prices would have risen by 1.3 percent in August 2008.
The most significant upward contributions came from higher prices for lettuce (up 33.6 percent), tomatoes (up 42.8 percent), cabbage (up 59.0 percent), courgettes (up 51.8 percent), and broccoli (up 18.4 percent). The latest monthly increase for lettuce was the combined result of higher shelf prices (up about 10 percent) and lighter weights (down about 19 percent).
The most significant downward contribution came from oranges (down 18.3 percent).
For the year to August 2008, fruit and vegetable prices increased 19.1 percent. Significant upward contributions came from higher prices for lettuce (up 145.3 percent), potatoes (up 28.0 percent), broccoli (up 82.3 percent), apples (up 25.1 percent), and cabbage (up 148.9 percent). The most significant individual downward contribution came from tomatoes (down 24.4 percent).
Vegetable prices have increased by a total of 36.4 percent over the past four months, reflecting poor growing conditions caused by unusually wet weather.
Grocery food
Prices for the grocery food subgroup increased 1.9 percent in August 2008, following increases of 0.5 percent and 0.4 percent in July and June 2008, respectively.
The most significant upward contributions came from higher prices for cakes and biscuits (up 8.0 percent), fresh milk (up 4.4 percent) and potato crisps (up 9.4 percent).
The most significant individual downward contribution came from lower prices for yoghurt (down 8.9 percent).
In August 2008, 31.7 percent of surveyed grocery food prices increased and 21.7 percent decreased. However, the proportion of items that increased in price and went 'off special' (12.7 percent) was lower than the proportion of items that decreased in price and went 'on special' (15.3 percent).
For the year to August 2008, prices for the grocery food subgroup increased 13.1 percent. The most significant upward contributions came from higher prices for cheddar cheese (up 64.8 percent), bread (up 17.4 percent), fresh milk (up 12.5 percent), and butter (up 87.6 percent).
Meat, poultry and fish
Prices for the meat, poultry and fish subgroup increased 2.6 percent in August 2008, following a decrease of 1.0 percent in July 2008 and an increase of 1.3 percent in June 2008.
The most significant upward contributions came from higher prices for lamb chops (up 18.2 percent), minced beef (up 8.4 percent), and fresh chicken (up 2.3 percent).
For the year to August 2008, prices for the meat, poultry and fish subgroup increased 5.8 percent. The most significant upward contributions came from higher prices for beef (up 7.6 percent), frozen chicken (up 16.8 percent), lamb chops (up 17.7 percent), and bacon (up 9.8 percent).
Other subgroups
In August 2008, higher prices were recorded for the restaurant meals and ready-to-eat food subgroup (up 0.5 percent) and the non-alcoholic beverages subgroup (up 0.3 percent).
Within these subgroups, the most significant upward contributions came from higher prices for ready-to-eat food (up 0.5 percent), restaurant meals (up 0.6 percent), and energy drinks (up 3.2 percent).
The most significant individual downward contribution came from lower prices for instant coffee (down 4.2 percent).
For the year to August 2008, prices for the restaurant meals and ready-to-eat food subgroup increased 6.0 percent and non-alcoholic beverages subgroup increased 7.0 percent.
For technical information contact:
Gareesh Madhas or Daniel Griffiths
Wellington 04 931 4600
Email: info@stats.govt.nz
Review of the Consumers Price Index
The release of the September 2008 FPI will be later than usual, due to the implementation of a review of the Consumers Price Index (CPI). The September 2008 FPI will be released on 21 October 2008, the same day as the reweighted CPI for the September 2008 quarter.
The CPI will incorporate:
- an updated basket of goods and services
- an updated expenditure weighting pattern.
An information paper, detailing the changes made to the CPI, will be released on 7 October 2008.
Changes to the FPI, made as part of this review, were incorporated with the release of the July FPI on 25 August 2008.
Subsequent CPI and FPI releases will be published at the usual times.
For technical information on the CPI review, contact:
Chris Pike or Daniel Griffiths
Wellington 04 931 4600
Email: info@stats.govt.nz
Next release ...
Food Price Index: September 2008 will be released on 21 October 2008.