Food prices rose by 0.8 percent in January 2009, taking the annual increase in food prices to 9.5 percent.

However, the idea that food prices are surging is just plain sensationalism and misleading.  The graph shows that prices have eased quite dramatically since around August and September 2008.  This easing won't flow through the annual numbers until around August 09.  All we are seeing in the annual numbers are the surge in the six months before August 08 - which was where we could really argue that prices were surging.   Sure, 0.8 percent on a month is high, but nothing compared to the 2.7 percent increase in August 2008. The 0.8 percent this month merely a blip following declining prices in two of the previous three months.

On the year, all five subgroups rose, lead by grocery food (up 10.0 percent), meat, poultry and fish (up 11.8 percent), fruit and vegetables (up 13.4 percent), restaurant meals and ready-to-eat food (up 6.0 percent), and non-alcoholic beverages (up 6.9 percent). Within these subgroups, the most significant contributions came from bread (up 20.8 percent) and ready-to-eat food (up 6.5 percent).

On the month a dramatic increase in the price of tomatoes (49.5 percent), kiwifruit (48.2 percent) and mandarins (37.3 percent) saw the fruit and vegetables index increase by 3.6 percent.

The only index that saw a decline in the January month was meat, poultry and fish, with lamb prices down almost 10 percent on December.  We were wondering how the New Zealand sheep population had fallen so low...