Food Price Index: April 2011

Commentary

Food prices in April 2011

Food prices were flat (up 0.1 percent) in April 2011. This follows price rises of 0.3 percent and 0.1 percent in March and February 2011, respectively.

In April 2011, higher prices were recorded for the following subgroups: grocery food (up 1.0 percent), non-alcoholic beverages (up 1.7 percent), and restaurant meals and ready-to-eat food (up 0.3 percent).

Lower prices were recorded for fruit and vegetables (down 3.3 percent) and meat, poultry, and fish (down 0.5 percent).

The most significant upward contributions came from higher prices for soft drinks (up 1.8 percent), margarine (up 12.8 percent), bread (up 2.1 percent), and sausages (up 5.2 percent).

The most significant individual downward contribution came from lower prices for lettuce (down 15.8 percent). Seasonally lower prices were recorded for kiwifruit (down 27.4 percent). Porterhouse/sirloin beef steak and canned soup prices fell 5.5 percent and 13.5 percent, respectively, reflecting a rise in the level of discounting.

 Graph, Index points contribution to food price index, By subgroup, April 2011.

Food price index subgroups: April 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
-5.48 
 -0.86 
4.87
2.13
0.72
-3.3 
 -0.5 
1.0
1.7
0.3
Food price index 1.37  0.1
Note: Index points contributions may not sum to total due to rounding.

Annual movements

In the year to April 2011, food prices increased 6.1 percent. This includes a 2.2 percent rise in food prices in October 2010 when the rate of goods and services tax (GST) rose from 12.5 to 15 percent. Although food prices are now 6.1 percent higher than a year ago, they are 6.6 percent higher than two years earlier and 14.7 percent higher than three years earlier. The latest annual increase 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 5.8 percent)
  • fruit and vegetables (up 8.7 percent)
  • meat, poultry, and fish (up 6.0 percent)
  • restaurant meals and ready-to-eat food (up 4.6 percent)
  • non-alcoholic beverages (up 7.6 percent).

The most significant upward contributions came from higher prices for fresh milk (up 9.3 percent), soft drinks (up 6.1 percent), potatoes (up 30.9 percent), lettuce (up 47.8 percent), and lamb chops (up 23.3 percent).

The most significant individual downward contribution came from lower prices for bananas (down 6.2 percent). Lower prices were also recorded for bacon (down 4.0 percent).

Food price index subgroups: year to April 2011
Subgroup Index points contribution to FPI Percentage change from Apr 2010
Fruit and vegetables
Meat, poultry, and fish
Grocery food
Non-alcoholic beverages
Restaurant meals and ready-to-eat food
12.92 
12.12
26.83 
9.21
11.08 
8.7
6.0
5.8
7.6
4.6
Food price index 72.16 6.1
Note: Index points contributions may not sum to total due to rounding.

Grocery food

In April 2011, grocery food prices rose 1.0 percent, following rises of 0.4 percent and 0.6 percent in March and February 2011, respectively. Grocery food prices have risen 2.0 percent over the past three months.

Margarine prices rose 12.8 percent in April 2011, reflecting a reduction in the level of discounting. Margarine prices are now 0.9 percent below their February 2010 peak. Bread prices rose 2.1 percent. This follows a 4.6 percent rise in March 2011, and bread prices are now at their highest recorded level. Prices for cakes and biscuits rose 1.8 percent in April 2011.

The largest individual downward contribution came from canned soup (down 13.5 percent). This price fall was strongly influenced by a high level of discounting.

For the year to April 2011, grocery food prices increased 5.8 percent. This reflects a 9.3 percent increase in fresh milk prices, despite prices falling 0.2 percent in both the April and March 2011 months. For the year to April 2011, bread prices were up 7.5 percent and cake and biscuits prices were up 7.5 percent. 

Graph, Grocery food subgroup, Monthly change, April 2010 to April 2011.    Graph, Grocery food subgroup, Annual change, April 2010 to April 2011.
 Graph, Grocery food and food price index, Monthly indexes, Base: June 2008 (=1000), April 2008 to April 2011.

Fruit and vegetables

Prices for the fruit and vegetables subgroup fell 3.3 percent in April 2011, following falls of 1.6 percent and 1.7 percent in March and February 2011, respectively. 

Fresh fruit prices fall in April months, while prices of fresh vegetables often fall. In April 2011, vegetable prices fell 3.8 percent, with about two-thirds of vegetables monitored in the food price index (FPI) falling in price. Fruit prices fell 2.5 percent in April 2011.

The most significant downward contributions came from falls in the prices of:

  • lettuce (down 15.8 percent)
  • kiwifruit (down 27.4 percent)
  • broccoli (down 16.1 percent)
  • bananas (down 4.5 percent)
  • potatoes (down 3.9 percent).

Although lettuce prices fell in April 2011, they are still about 24 percent higher than average for the month of April during the past decade. Kiwifruit prices usually fall in April as the new season's crop becomes available. Potato prices often fall at this time of year and are now 17.1 percent lower than their highest recorded level in January 2011. Supplies of potatoes have been affected by disease.

The most significant upward contribution came from seasonally higher prices for strawberries (up 11.8 percent).

For the year to April 2011, fruit and vegetable prices increased 8.7 percent. The most significant individual upward contributions came from higher prices for potatoes (up 30.9 percent) and lettuce (up 47.8 percent).

Graph, Fruit and vegetables subgroup, Monthly change, April 2010 to April 2011. Graph, Fruit and vegetables subgroup, Annual change, April 2010 to April 2011.

 Graph, Fruit and vegetables and food price index, Monthly indexes, Base: June 2008 month (=1000), April 2008 to April 2011.

Other subgroups

In April 2011, non-alcoholic beverage prices rose 1.7 percent and restaurant meals and ready-to-eat food prices rose 0.3 percent.

Lower prices were recorded for meat, poultry, and fish (down 0.5 percent).

Within the non-alcoholic beverages subgroup, the most significant individual upward contribution came from higher prices for soft drinks (up 1.8 percent). Soft drink prices reached their highest level in April 2011, following price rises in January, February, and March 2011. The four consecutive monthly increases follow significant discounting in December 2010. Coffee prices rose 5.1 percent in April 2011. Coffee prices are now at their highest recorded level and are 3.6 percent higher than their previous peak in October 2009. For more information on historical soft drink and coffee prices, see Running hot and cold: tracking non-alcoholic beverage prices in the CPI in the April 2011 Price Index News.  

Within the meat, poultry, and fish subgroup, higher prices were recorded for sausages (up 5.2 percent). The largest individual downward contribution came from lower prices for porterhouse/sirloin beef steak (down 5.5 percent), reflecting a high level of discounting. The largest upward contribution came from lamb (up 1.0 percent). Lamb prices are now at their highest recorded level. On an annual basis, lamb prices increased 23.8 percent. This is the largest annual increase since July 2009, when prices increased 32.1 percent.

For the year to April 2011, prices for meat, poultry, and fish increased 6.0 percent, restaurant meals and ready-to-eat food increased 4.6 percent, and non-alcoholic beverages were up 7.6 percent. 

 Graph, Selected indexes and food price index, Monthly indexes, Base: June 2008 month (=1000), April 2008 to April 2011.

Distribution of item-level movements

The table below outlines the distribution of price movements in March and April 2011. The 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 Feb to Mar 2011 Mar to Apr 2011
Increase in price
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Weighted average price increase (percent)
89
56.7
62.9
21.8
2.8
88
56.1
55.0
17.1
2.5
No change in price
Number of items
Percentage of all items
Percentage of expenditure weight
2
1.3
1.6
2
1.3
0.7
Decrease in price
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Weighted average price decrease (percent)
66
42.0
35.5
-17.7
4.0
67
42.7
44.4
-15.7
2.8

The distribution of item-level movements shows that for April 2011, compared with March 2011: 

  • there was a larger fall in the average price decrease than in the average price increase
  • the expenditure weights for items that increased in price fell, while the expenditure weight for items that decreased in price rose substantially.

This led to a 0.1 percent rise for the April 2011 FPI, following a 0.3 percent rise in March 2011.

Graph, Index points contribution to food price index, April 2010 to April 2011.

The graph above shows that the impact from the items that fell in price offset those that rose in price. This is similar to the price movement in February 2011. 

Impact of the Christchurch earthquake on price collection

Price collection did not take place in March, following the Christchurch earthquake on 22 February 2011. For Christchurch, price movements for the rest of New Zealand were used to calculate the March FPI.

Statistics New Zealand began collecting food (and non-food grocery) prices again in April 2011. While we were able to collect prices from most outlets in Christchurch in April, some were not open for business. For these outlets, price movements from other Christchurch outlets, where prices were collected, were used.

The Christchurch FPI rose 0.4 percent from February (when prices were last collected) to April 2011, compared with a rise of 0.4 percent for the New Zealand FPI over the same period. The 0.4 percent rise in Christchurch was the seventh largest of the 15 FPI regions. Prices in Dunedin, Nelson, and Invercargill rose 1.5 percent, 0.4 percent, and 0.3 percent, respectively, while prices in Timaru fell 1.5 percent.

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

Next release ...

Food Price Index: May 2011 will be released on 14 June 2011.