Food prices fell 1.8 percent in the year to July 2012, despite a
small monthly increase for July (up 0.2 percent), Statistics New
Zealand said today.

"Food prices have fallen for the year, reflecting cheaper
vegetables, dairy products, and lamb," prices manager Chris Pike
said.

For the year to July 2012, food prices fell 1.8 percent. Four of
the five food subgroups made downward contributions to the food
price index (FPI). Lower prices were recorded for fruit and
vegetables (down 6.6 percent), grocery food (down 1.7 percent),
meat, poultry, and fish (down 1.6 percent), and non-alcoholic
beverages (down 2.1 percent). Higher prices were recorded for
restaurant meals and ready-to-eat food (up 1.4 percent).

The most significant decreases for the year came from lower prices
for tomatoes (down 28 percent, from an average of $13.25/kg in July
2011 to $9.58/kg in July 2012) and lettuce (down 32 percent). The
higher tomato prices in July 2011 were influenced by
lower-than-usual imports from Australia last winter following
floods in Queensland earlier in 2011.

Fresh milk prices were down 9.3 percent on July last year, and
prices for cheddar cheese (down 15 percent) and butter (down 27
percent) were also lower.

Lamb prices were 24 percent lower than in July 2011, and are now at
their lowest level since May 2010.

Kumara prices rose 84 percent to their highest level since February
2008, influenced by low prices in July 2011 and poor weather
conditions in both the planting and harvesting seasons, which
affected this year's crop.

In the July 2012 month, fruit and vegetable prices rose 4.4
percent, including a seasonal increase

in lettuce prices (up 41 percent). Seasonally higher prices were
also recorded for strawberries (up 23 percent) and capsicums (up 25
percent).

Grocery food prices fell 0.6 percent in July. Prices fell for bread
(down 3.0 percent) and chocolate (down 4.5 percent). Fresh milk
prices (down 1.5 percent) fell for the fourth month in a row.

The FPI measures the rate of price change of food and food services
purchased by households. Statistics NZ visits shops across New
Zealand to collect prices for the FPI and check package sizes.