Photo: RNZ
- Food prices rise 3.7 percent in year ended April, highest since January 2024
- Surging dairy prices, instant coffee driving food inflation
- Energy and airfares rise offsetting cheaper petrol
- Inflation pressures a touch stronger
Food prices have risen at their fastest pace in more than a year driven by more expensive dairy products, and hinting that inflation pressures are gathering pace.
Stats NZ said the food price index rose 3.7 percent in the 12 months ended April, the highest since January last year.
"Price increases were widespread, with all five food groups recording an increase," spokesperson Nicola Growden said.
Groceries were a key part of the overall rise, increasing 5.2 percent over the past year, because of large increases for butter, milk, cheese, and coffee.
The price of butter increased 65 percent, cheese was up 24 percent, and milk 15 percent.
"The average price for 500 grams of butter was $7.42 in April 2025. That's nearly $3 more expensive than this time last year," Growden said.
World dairy prices have been surging amid increased demand and reduced supply, thus pushing up domestic costs.
Similarly, global prices for coffee have been pushed higher because of disease and bad weather in key producing countries. A 100 gram pack of instant coffee had increased more than 17 percent in the past year.
Stats NZ said airfares, energy costs, and rents were all up last month offsetting cheaper fuel and accommodation.
ASB senior economist Mark Smith said the monthly price indicators were volatile but pointed to building pockets of inflation pressures.
"Annual CPI inflation will likely remain parked towards the upper part of the 1-3 percent target range for much of 2025. While this is unlikely to prevent official cash rate cuts, the RBNZ will be somewhat cautious."
The RBNZ is widely expected to cut the cash rate by 25 basis points to 3.25 percent at its next monetary statement in two weeks.
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