11 Jun 2010

Food prices show first drop in six years

9:18 pm on 11 June 2010

Food prices have fallen by 0.5% in the past year, the first annual decrease in nearly six years.

Data from Statistics New Zealand shows food prices overall fell by 0.7% last month, with the biggest drop in the price of meat, poultry and fish, which fell by 2.4%.

In the 12 months to the end of May, food prices decreased by 0.5% and they are now back down to levels last seen in 2008.

However, ASB economist Jane Turner says consumers should expect prices to rise in future, especially for dairy products.

Food prices make up nearly 18% of the Consumer Price Index, and Ms Turner says the predicted increases will boost inflation pressure.

The last annual decrease in food prices was in July 2004.