New Zealand Food Prices Jumped 1 % in May 2008

A leap of 1 per cent in the food prices for the month of May 2008 drove the Food Price Index (FPI) up 6.8 per cent in the year 2008 to May 2008, reports Statistics New Zealand.

According to the reports released by the Statistics New Zealand on food prices in the month of May 2008, showing the prices of food edged higher 1.0% on month from 0.3% increase in April 2008.

For the year 2008 to May 2008, food prices rose 6.8%, with the most significant upward contribution came from higher prices for the grocery food subgroup, which was up 11.8% recorded in May, reports RTT News.

This increase in the food prices was mainly driven by higher prices for fruit and vegetables, non-alcoholic beverages and grocery food. Talking about fruit and vegetables subgroup, the main contributor for the food price rise was driven in particular by tomatoes, lettuce and broccoli.

Price and demand of soft drink became the main contributor for price rise in the non-alcoholic beverages subgroup and the grocery food subgroup price rose due to higher prices for a wide range of goods within this subgroup.

Rising oil prices is said to be another contributor for the food price rise not only for the country but through out the world. Also an increased demand and shift in eating habit from developing countries especially from China and India has created a gap in supply and demand for the food materials.

"Obviously if petrol prices and food prices do continue to rise from here, then we do risk inflation being a little bit higher than what the Reserve Bank expects," says Nick Tuffley, ASB Economist, reports One News.

According to the research analyst at Arth Business Research, “Skyrocketing oil prices and increasing prices of fruit and vegetables, non alcoholic beverages and food grocery along with increasing demand from developing countries is expected to increase the food prices further for the country.”