New Zealand food prices rose in December, following a fall in November, led by more expensive fruit and meat, while dairy products fell.

The food price index rose 0.3 percent last month, following November's 0.5 percent and a static October, according to Statistics New Zealand. The index was 1 percent higher than December a year earlier. Food prices make up 19 percent of the broader consumers price index (CPI), a measure of inflation compiled by the national statistician.

The Reserve Bank has paused its tightening cycle as inflation has remained low, after lifting the official cash rate 100 basis points to 3.5 percent between March and September last year. Last month, the central bank flagged low inflationary expectations could still be too high and is reviewing the way it assesses non-tradable inflation, which has undershot its estimates. Food prices sit in the tradable component of inflation.

December quarter CPI figures are scheduled for release next Wednesday, with the Bank of New Zealand forecasting a drop of 0.2 percent, the first quarter of deflation since March 1999.

Today's data shows prices for all but one of the five food groups in December, with fruit and vegetable price climbing 1.4 percent, with fruit climbing a seasonal 4.2 percent while vegetables slipped 0.8 percent, reflecting cheaper tomatoes, broccoli and lettuce. Meat, poultry and fish prices increased 0.9 percent, with chicken was up 2.6 percent to its highest level, while processed meat rose 1.6 percent.

Non-alcoholic beverage prices rose 1.6 percent, influenced by less discounting for soft drinks, while restaurant meals and ready-to-eat food prices rose 0.2 percent.

Grocery food prices, the largest contributor to the overall measure, fell 0.7 percent, led by a 10 percent drop in butter, while cheese declined 5.1 percent and fresh milk fell 1.7 percent. Yoghurt prices rose 14 percent.

On an annual basis, food prices rose 1 percent in the year to December, following a 0.6 percent increase in the year to November. Meat, poultry and fish climbed 3.2 percent, driving by a 9.3 percent increase in beef prices. Fruit and vegetable prices rose 3.2 percent, non-alcoholic beverages increased 3 percent and restaurant meals and ready-to-eat food prices rose 1.7 percent.

Again, grocery food prices was the only measure to fall on the annual reading, declining 1.5 percent over the year. Bread prices fell 14 percent, as supermarkets slashed their own-brand bread prices to $1, while the cost of cheese and butter also decreased, offset by an increase in fresh milk and yoghurt prices.