Food price inflation easing, but slowly; cheese up 4.8% while wholesale price down 46%

Monthly food price inflation blipped back up again in January as big jumps in tomato and kiwifruit prices added to surprising increases in cheese, pasta, bread and pork despite lower commodity and fuel prices. The figures suggest the fall in oil and dairy commodity prices is not being passed on to consumers quickly or at all in some cases by manufacturers and retailers. See our dairy price chart below to confirm. This makes the Reserve Bank's job of keeping inflation down a little harder and will disappoint many consumers hoping the lower wholesale petrol, cheese and butter prices might reduce their shopping bills. Food prices increased 9.5% in the year to January 09 and were up 0.8% for the month of January, Statistics NZ said. Food prices had fallen in two of the last 3 months and economists had expected a more moderate rise. BNZ's economists had forecast a 0.5% rise for the month. The biggest increase comes from fruit and vegetables, which rose 3.6%. Some of the largest jumps were tomatoes up 49.5%, kiwifruit up 48.2%, and mandarins up 37.3%. Other subgroups to rise included non-alcoholic beverages up 2.2%, grocery food up 0.4% and restaurant meals and ready-to-eat food up 0.4%. The only fall was from meat, poultry and fish, down 0.6% with lamb significantly down 9.6%. Pork prices are up 21.7% from a year ago, despite falling feed and fuel prices. The milk, cheese and egg price sub group rose 0.3%, with cheese up 1.7% for the month and still up 4.8% from a year earlier, even though wholesale cheese prices have fallen 46%. This follows data recently released for 2008 that the national sheep flock was 12 percent lower than in 2007. At 34 million, it was less than half the 70 million recorded in 1982 when sheep numbers peaked, says a Statistic NZ announcement. The January food price figures follow a decrease in the month of December 08 of 0.2%.