Seasonal gains for vegetables helped drive New Zealand food prices higher in June.
Food prices increased 0.4 percent in June from the month earlier according to Stats NZ with prices were 0.5 percent lower than June a year ago.
Vegetable prices led the gains advancing 8.4 percent due to seasonally higher prices as cucumber jumped 72 percent, capsicum rose 44 percent, lettuce increased 16 percent, and tomatoes were up 13 percent.
After adjusting for seasonal variations, food prices fell 0.9 percent as vegetable prices dropped 6.5 percent.
The food price index accounts for about 19 percent of the consumer price index, the Reserve Bank's mandated measure, and is typically seen as a barometer of wider inflation.
Annual inflation rose at a 0.4 percent pace in the March quarter, and Statistics NZ will release data for the June quarter on Monday.
ASB Bank economist Kim Mundy said the food prices data was softer than expected, prompting it to pull down its forecast for second quarter inflation to 0.5 percent, below the Reserve Bank's 0.6 percent forecast.
ASB didn't change its view for interest rates and continues to expect the Reserve Bank to cut in August and November, she said.
The decline in annual food prices was led by lower grocery prices which dropped 2.3 percent. Dairy product prices weakened, with cheese prices down 9.5 percent, fresh milk slipping 3.9 percent and yogurt falling 9.2 percent.
The average price of a kilo of cheddar cheese dropped to $7.68, from $9.12 a year earlier and marking the lowest level since September 2007, the statistics agency said.