Food Price Index: November 2011

Commentary

Food prices rise in November 2011

Food prices rose 0.2 percent in November 2011, following decreases of 1.3 percent in October and 1.0 percent in September. The rise in the food price index followed three consecutive monthly falls.

In November 2011, higher prices were recorded for the following subgroups: grocery food (up 0.7 percent), meat, poultry, and fish (up 0.9 percent), non-alcoholic beverages (up 1.3 percent), and restaurant meals and ready-to-eat food (up 0.4 percent). Lower prices were recorded for the fruit and vegetables subgroup (down 4.0 percent).

The most significant individual upward contributions came from porterhouse/sirloin beef steak (up 8.2 percent) and nectarines (up 61 percent). Higher prices were also recorded for soft drinks (up 1.8 percent), potato crisps (up 6.8 percent), and chocolate bars and blocks (up 5.0 percent).

The most significant individual downward contributions came from seasonally lower prices for lettuce (down 33 percent), tomatoes (down 23 percent), strawberries (down 37 percent), and zucchini (down 55 percent). Chocolate biscuit prices also fell (down 7.6 percent). 
 Graph, Index points contribution to food price index, by subgroup, November 2011.

Food price index subgroups: November 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

-6.24 
1.95
3.27
1.84
1.15
-4.0 
0.9 
0.7 
1.3
0.4
Food price index 1.97  0.2 
Note: Index points contributions may not sum to total due to rounding.

Food prices up for the year to November 2011

Food prices increased 1.9 percent in the year to November 2011, following increases of 1.1 percent and 4.7 percent in the years to October and September 2011, respectively. The September 2011 annual movement 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. This no longer contributes to annual movements, from October 2011 onwards.

Prices for four of the five subgroups increased in the year to November 2011.

The most significant upward contributions for the year came from ready-to-eat food (up 2.5 percent). Higher prices were also recorded for cakes and biscuits (up 7.1 percent), bread (up 5.4 percent), restaurant meals (up 2.3 percent), packaged coffee (up 17 percent), and chicken pieces (up 8.0 percent).   

Food price index subgroups: year to November 2011
Subgroup Index points contribution to FPI Percentage change from November 2010
Fruit and vegetables
Meat, poultry, and fish
Grocery food
Non-alcoholic beverages
Restaurant meals and ready-to-eat food
-11.02
6.42
15.80 
5.33
6.30
-7.2
3.2
3.3
4.2
2.4
Food price index 22.84 1.9
Note: Index points contributions may not sum to total due to rounding.

Grocery food prices rise

Prices for the grocery food subgroup increased 0.7 percent in November 2011, following decreases of 0.3 percent in October and 0.2 percent in September.

The rise in grocery food prices followed three consecutive monthly falls. Grocery food prices have returned to about the same level recorded in July 2011.

The largest individual contributors to the increase in November 2011 were potato crisps (up 6.8 percent) and chocolate bars and blocks (up 5.0 percent). Higher prices were also recorded for plain biscuits (up 11 percent) and cracker-type biscuits (up 5.8 percent). A reduced level of discounting contributed to these higher prices.

On an annual basis, grocery food prices increased 3.3 percent. The most significant upward contributions came from higher prices for cakes and biscuits (up 7.1 percent), bread (up 5.4 percent), ice cream and edible ices (up 7.3 percent), and chocolate (up 7.1 percent).

The most significant downward contribution for the year came from lower prices for cheddar cheese (down 8.7 percent).

Graph, Grocery food subgroup, monthly change, November 2010 to November 2011. Graph, Grocery food subgroup, annual change, November 2010 to November 2011.
 Graph, Grocery food subgroup and selected indexes, monthly indexes, November 2008 to November 2011.

Fruit and vegetable prices continue to show seasonal fall

Prices for the fruit and vegetables subgroup decreased 4.0 percent in November 2011, following decreases of 6.1 percent in October 2011 and 8.6 percent in September 2011. Prices for both vegetables and fruit fell in November 2011, down 6.7 percent and 0.2 percent respectively.

In November 2011, the most significant downward contributions came from lower prices for lettuce (down 33 percent), tomatoes (down 23 percent), strawberries (down 37 percent), and zucchini (down 55 percent). Lower prices for lettuce and tomatoes accounted for about four-fifths of the fall in vegetable prices.

The most significant upward contributions came from seasonally higher prices for nectarines (up 61 percent) and kiwifruit (up 28 percent). Prices of nectarines usually rise in November months when there is a transition between imported and domestic supply in the market. Though prices of nectarines and kiwifruit rose in November, they were cheaper than a year earlier.

If fruit and vegetable prices had stayed the same as they were in October 2011, the food price index would have risen 0.6 percent in November 2011.

For the year to November 2011, fruit and vegetable prices decreased 7.2 percent. Vegetable prices were down 8.8 percent and fruit prices were down 6.1 percent. The most significant downward contributions came from avocados (down 48 percent), tomatoes (down 25 percent), and potatoes (down 12 percent).

Graph, Fruit & vegetables subgroup, monthly change, November 2010 to November 2011. Graph, Fruit & vegetables subgroup, annual change, November 2010 to November 2011.
 Graph, Fruit & vegetables subgroup and selected indexes, monthly indexes, November 2008 to November 2011.

Summary of other food subgroup movements

Higher prices were recorded in November 2011 for three subgroups: meat, poultry, and fish (up 0.9 percent), non-alcoholic beverages (1.3 percent), and restaurant meals and ready-to-eat food (up 0.4 percent).

Within these subgroups, the most significant upward contributions came from higher prices for sirloin/porterhouse beef steak (up 8.2 percent) and soft drinks (up 1.8 percent). The upward movement in sirloin/porterhouse beef steak prices was influenced by a reduction in the level of discounting.

The most significant downward contributions came from lower prices for whole frozen chicken (down 5.3 percent), lamb chops (down 4.3 percent), and packaged coffee (down 1.7 percent). Lower prices for these items were influenced by discounting. Although prices for coffee fell in November 2011, they were higher than the same month last year.

For the year to November 2011, higher prices were recorded for the meat, poultry, and fish subgroup (up 3.2 percent), restaurant meals and ready-to-eat food (up 2.4 percent), and non-alcoholic beverages (up 4.2 percent). The most significant upward contribution came from packaged coffee (up 17 percent). 

 Graph, Other selected indexes, monthly indexes, November 2008 to November 2011.

Impact of items that rose and fell in price

The graph below shows how the items that rose and fell in price affected the food price index (FPI). Comparing November 2011 with October 2011, the impact of the items that rose in price was larger and the impact of the items that fell in price was smaller. This led to a small increase in the FPI in November, compared with a decrease in October.

Comparing November 2011 with November 2010, the impact of the items that rose in price was about the same, while items that fell in price had less impact in November 2011.

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

 

The following table outlines the distribution of price movements in October and November 2011. In the table, the FPI is divided into three categories at the national item-level: those that increased, those that showed no change, and those that decreased.

Distribution of item-level index movements
Sep to Oct 2011 Oct to Nov 2011
Increase in price
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Weighted average price increase (percent)
77
47.8
45.9
14.4
2.5
92
57.1
63.9
22.0
2.8
No change in price
Number of items
Percentage of all items
Percentage of expenditure weight
3
1.9
2.8
2
1.2
2.1
Decrease in price
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Weighted average price decrease (percent)
81
50.3
51.3
-30.3
4.7
67
41.6
34.0
-20.1
4.7

For more detailed data from the FPI see the Excel tables in the 'Downloads' box.