Food price index in New Zealand

The Food Price Index measures the monthly change in the prices of food bought by New Zealand households. Published by Stats NZ within its 'selected price indexes', it is a heavily weighted and volatile component of the CPI, which in New Zealand is quarterly, so this monthly reading serves as an early guide.

Stats NZ collects the prices of a representative food basket in the main urban centres each month and computes the month-on-month (MoM) and year-on-year (YoY) change of the index against a base year. The figures are typically published without seasonal adjustment.

Because it is monthly and heavily weighted, it is a key advance signal for the quarterly CPI: upside surprises reinforce inflation expectations and bets on higher rates from the Reserve Bank of New Zealand (RBNZ), which tends to support the New Zealand dollar.

It is highly volatile because of the seasonality of fruit and vegetables and international prices, and it does not represent overall inflation, only the food component. It is best read alongside other price indices and as a trend rather than in isolation.