20 Apr 2010

Supermarket warns of more price rises

9:37 pm on 20 April 2010

A supermarket chain is warning of more price rises as the cost of living edged up again in the first three months of the year.

The Consumer Price Index rose 0.4% in the March quarter, following a 0.2% fall in the previous three months.

Drought and surging commodity prices on world markets are putting upward pressures on food prices.

Foodstuffs chief executive Tony Carter says fresh produce and dairy products are under the most pressure.

Imports have also become more expensive because of this year's fall in the dollar.

Retailers Association spokesperson John Albertson says this will be passed on as shopkeepers run out of old stocks.

A possible hike in GST and the introduction of the Emissions Trading Scheme are also expected to put pressure on prices.

Food and petrol were the biggest contributors to a 0.4% quarterly increase. Food prices rose 1% and petrol prices 6.9%.

The annual rate of inflation stands at the midpoint of the Reserve Bank's 1% to 3% target over the medium term.

The quarterly figure was barely above the bank's forecast for the period of 0.3% and economists say there is little pressure on it to raise interest rates until the middle of this year.