Food prices spike to 36-year highs

Food prices have spiked back to 36-year highs, driven by surging vegetable costs.

Prices rose 1.6 percent in June on the month before, the biggest monthly rise since the start of the year.

Fruit and vegetables rose 8.1 percent for June, though after seasonal adjustment the rise was 2 percent, Stats NZ said.

"Prices for fruit and vegetables such as tomatoes, capsicums, and lettuce contributed the most to the overall monthly rise," consumer prices manager James Mitchell said.

There were small rises for meat, groceries, and restaurant and takeaway meals.

Annual food inflation picked up to 12.5 percent, equalling April's rate and the highest since 1987 when GST was brought in.

For the year ended June fruit and vegetable prices were up 22 percent, notably kūmara and potatoes which were affected by bad weather, while eggs and some dairy products helped push grocery prices 12.8 percent higher.

"Increasing prices for fresh eggs, six-pack yoghurt, and cheddar cheese were the largest drivers within grocery food," Mitchell said.

Restaurant meals and ready-to-eat food prices increased 9.2 percent, meat, poultry, and fish prices were up 11 percent and non-alcoholic beverage prices rose 9.7 percent.