Food Price Index: September 2009

Food prices in September 2009

Food prices fell 0.7 percent in September 2009, following a decrease of 0.9 percent in August 2009 and an increase of 0.6 percent in July 2009. This is the first time the Food Price Index (FPI) has fallen for two consecutive months since falls of 0.1 percent and 0.2 percent in September and August 2005, respectively.

In September 2009, lower prices were recorded for the fruit and vegetables subgroup (down 8.4 percent) and the grocery food subgroup (down 0.1 percent). Higher prices were recorded for the following subgroups: meat, poultry, and fish (up 1.8 percent), non-alcoholic beverages (up 1.9 percent), and restaurant meals and ready-to-eat food (up 0.3 percent).

The most significant individual downward contributions came mostly from lower prices for lettuce (down 40.7 percent), cucumber (down 25.5 percent), and capsicum (down 23.5 percent).

The most significant upward contributions came from higher prices for fresh chicken (up 6.9 percent), soft drinks (up 2.4 percent), and minced beef (up 6.8 percent).

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Distribution of item-level movements

The table below outlines the distribution of price movements in September 2009 and August 2009. The FPI has been partitioned into those national item-level indexes that increased, showed no change, or decreased.

 

The distribution of item-level movements shows that:

• the percentage of expenditure weight of items that increased in price fell slightly, while the percentage of expenditure weight of items that decreased in price rose.
• the weighted average price decrease was greater than the weighted average price increase.
• the weighted average price increase rose more than the weighted average price decrease.

These movements resulted in a 0.7 percent decrease in the September 2009 FPI, following the 0.9 percent decrease in August 2009.

Annual movements

Food prices increased 3.3 percent in the year to September 2009, following increases of 4.6 percent and 8.4 percent in the years to August and July 2009, respectively. The September 2009 annual increase is the lowest annual increase since a 3.0 percent increase in the year to June 2007.

Four of the food subgroups increased in the year to September 2009. The most significant upwards contribution came from higher prices for grocery food (up 3.8 percent), followed by meat, poultry, and fish (up 7.1 percent), non-alcoholic beverages (up 9.7 percent), and restaurant meals and ready-to-eat food (up 3.6 percent).

The only subgroup to decrease was fruit and vegetables (down 7.4 percent). Vegetable prices were down 14.4 percent, while fruit prices rose 6.0 percent.

The most significant upward contributions came from higher prices for soft drinks (up 11.3 percent), bread (up 11.3 percent), bacon (up 18.2 percent), and sausages (up 20.2 percent).

Fruit and vegetables

Prices for the fruit and vegetables subgroup decreased 8.4 percent in September 2009, following a decrease of 3.3 percent in August 2009 and an increase of 3.1 percent in July 2009. This is the largest fall in fruit and vegetable prices since a fall of 10.2 percent in February 2006. (Note the fruit and vegetables subgroup was seasonally adjusted until the June 2006 month. All historical references are to seasonally unadjusted prices.)

Lower vegetable prices (down 12.8 percent) accounted for nearly all of the decrease in the fruit and vegetables subgroup in September 2009, following a 3.2 percent fall in August 2009. This comes after double-digit price increases in July 2009 for over half of the green vegetables monitored for the FPI, influenced by the unusually cold weather in May. The September 2009 fall is likely to have been influenced by the unusually warm weather in August 2009, and is the largest fall in vegetable prices recorded in the past decade.

The most significant downward contributions to the September 2009 fall came from lower prices for lettuce (down 40.7 percent). Lower lettuce prices accounted for over half of the 12.8 percent fall in the price of vegetables in September 2009. Prices for cucumber (down 25.5 percent) and capsicum (down 23.5 percent) also fell.

For the year to September 2009, fruit and vegetable prices decreased 7.4 percent. This is the largest annual fall in fruit and vegetable prices since they fell 7.7 percent for the year to September 2005. Vegetable prices were down 14.4 percent for the year to September 2009, the largest annual fall in vegetable prices this decade, and fruit prices were up 6.0 percent. The most significant downward contributions came from lower prices for lettuce (down 37.2 percent), tomatoes (down 26.5 percent), and broccoli (down 43.1 percent). The most significant upward contribution came from higher prices for bananas (up 17.5 percent).

 

 

Other subgroups

Slightly lower prices were recorded for the grocery food subgroup (down 0.1 percent), and higher prices were recorded for the meat, poultry, and fish (up 1.8 percent), non-alcoholic beverages (up 1.9 percent), and restaurant meals and ready-to-eat food (up 0.3 percent) subgroups.

The grocery food subgroup has decreased for two months in a row from its record high in July 2009. Grocery food prices have returned to about the same level recorded in May 2009.

Within these subgroups, the most significant downward contribution in the latest month came from lower prices for potato crisps (down 3.5 percent) and ham (down 5.0 percent). The most significant upwards contributions came from higher prices for fresh chicken (up 6.9 percent), soft drinks (up 2.4 percent), and minced beef (up 6.8 percent). Prices for minced beef are at their highest level since November 2008.

 

 

For technical information contact:
Cindy Qin or Daniel Griffiths
Wellington 04 931 4600
Email: info@stats.govt.nz

Next release ...

Food Price Index: October 2009 will be released on 11 November 2009.