New Zealand consumer prices fall as vegetable supply returns to normal.

A sharp drop in the price of vegetables caused a dip in prices for New Zealand consumers in the last Quarter, according to figures from the government statistics agency Thursday. The consumers price index (CPI) fell 0.3% for the December quarter as the country emerged from a supply shortage caused by severe floods in the Australian state of Queensland last year, Statistics New Zealand said.

The main reason for the fall was lower vegetable prices, Statistics New Zealand prices manager Chris Pike said in a statement.

Vegetable prices fell 25% in the December quarter, causing a 2.2% fall in overall food prices.

The larger-than-usual fall for vegetables reflects a supply shortage in the three months to September, Mr. Pike said.

Basically, vegetable prices were higher than normal last winter, then fell to normal levels towards the end of the year. If vegetable prices had remained constant in the December 2011 Quarter, the CPI would have risen 0.1%.

Vegetable prices fell strongly from their winter peak in July, which was higher than usual due to a supply shortage following the Queensland floods earlier in Y 2011, said the CPI commentary.

Prices for telecommunication services, furniture, kitchenware and appliances were also down, but were partly countered by rises in international air fares and petrol.

Telecommunication services were the second biggest contributor to the fall in the CPI, dropping 3.6% with higher data caps and lower prices for broadband plans, and lower international calling rates from landline phones.

Prices for household contents and services were down 1.5%.

This reflected lower prices for furniture, kitchenware and appliances. There was more discounting in the December 2011 Quarter than in the previous three months or in the final Quarter of Y 2010, Pike said.

Transport saw the biggest rise, up 1.4% in the Quarter, with international air fares up 5.8%, petrol up 0.9% and used cars up 1.8%.

In the year to the end of the December quarter, the CPI rose 1.8%.

On an annual basis, petrol prices increased 11%, cigarettes and tobacco were up 9.4%, housing rentals were up 2%, used cars were up 5.1% and local government rates were up 4.6%.

Paul A. Ebeling, Jnr. strong>Paul A. Ebeling, Jnr

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.