Economic week
September 15, 2017
By Nick Clark
Food prices rose 0.6 percent in the month of August, according to Statistics NZ’s monthly Food Price Index.
Vegetable prices were the main upward contributor, increasing 5.4 percent. However, vegetable prices are highly seasonal and they were down 1.1% when seasonally adjusted. In contrast, fruit prices fell 0.5% (but were up 0.1% after seasonal adjustment).
Meat, fish & poultry prices were down 0.2 percent, with beef & veal down 0.5% and mutton, lamb and hogget up 4.3%. Grocery food prices were up 0.3%, with bread & cereals up 0.3% and milk, cheese & eggs down 0.4%.
On an annual basis, the Food Price Index was up 2.3% compared to August 2016. Vegetable prices were up 8.7% and fruit prices up 0.3%. Meat, fish & poultry prices were up 0.6%, with beef prices down 2.6% and sheepmeat prices up 5.1%. Grocery food prices were up 2.8% with bread & cereals up 0.6% and milk, cheese & eggs up 6.1%.
Butter prices reached a record high of $5.39 per 500g block, up 62% for the year. This is a reflection of strong international prices for butter over the past year, as shown by the Global Dairy Trade where butter traded last week at US$5,954 per tonne, up from US$3,892 the same time last year.
Meat and dairy processing comprises around 30% of the manufacturing sector’s total sales and its strong growth in the June quarter kept manufacturing positive in the June quarter, according to Statistics NZ’s quarterly Economic Survey of Manufacturing.
Total manufacturing sales in real terms (expressed in constant prices) rose 1.0% in the June 2017 quarter compared to March 2017, with meat and dairy processing up 8.2% and other manufacturing down 0.2%.
This picture was reversed comparing June 2017 with June 2016. Total manufacturing was up 0.4%, with meat and dairy processing down 4.4% but other manufacturing up 2.6%.
Next week sees the release of Balance of Payments for the June quarter, Travel and Migration for the month of August, a Global Dairy Trade auction, and Gross Domestic Product for the June quarter. They will be the last major pieces of economic news before the 23 September election.
Exchange Rates
|
NZ Dollar versus
|
This Week (14/9/17)
|
Last Week 7/9/17)
|
Last Month (14/8/17)
|
Last Year (14/9/16)
|
|
US Dollar
|
0.7256
|
0.7214
|
0.7316
|
0.7251
|
|
Australian Dollar
|
0.9066
|
0.9022
|
0.9252
|
0.9700
|
|
Euro
|
0.6110
|
0.6050
|
0.6184
|
0.6464
|
|
UK Pound
|
0.5494
|
0.5530
|
0.5622
|
0.5500
|
|
Japanese Yen
|
80.30
|
78.71
|
80.01
|
74.72
|
|
Chinese Renmimbi
|
4.7528
|
4.7056
|
4.8708
|
4.8363
|
|
Trade Weighted Index
|
75.87
|
75.33
|
77.11
|
77.62
|
|
|
This Week (14/9/17)
|
Last Week 7/9/17)
|
Last Month (14/8/17)
|
Last Year (14/9/16)
|
|
OCR
|
1.75%
|
1.75%
|
1.75%
|
2.00%
|
|
90 Day Bank Bill
|
1.94%
|
1.95%
|
1.96%
|
2.24%
|
|
10 Year Government Bond
|
2.90%
|
2.83%
|
2.82%
|
2.54%
|
Source: Reserve Bank of NZ