A little relief at last. The Food Price Index for July rose 9.6% annually, with Statistics NZ noting in its release that overall food inflation had slowed.
Grocery food prices rose 11.9% annually, and fruit and vegetable prices backed off their eye-watering highs to increase by 6.2% in July 2023 when compared to the same month last year.
“While overall food inflation has slowed, it is comparable to the increases we saw in 2008 and 2011,” Stats NZ consumer prices manager James Mitchell said.
Increasing prices for fresh eggs, potato crisps, and six-pack yoghurt were the largest drivers within grocery food, Mitchell said.
Stats NZ said the annual increase was due to rises across all the broad food categories it measures.
However, food prices fell 0.5% in July compared with June, Stats NZ said. Prices for fruit and vegetables such as tomatoes, avocadoes, and oranges contributed most to the monthly fall.
“While prices for fruit and vegetables fell 4.1% in the month, they are 6.2% more expensive than this time last year,” Mitchell said.
Food price inflation hit its highest level in 36 years in May with the Food Price Index rising 12.5% in the year ended April, the highest annual rate since late 1987.
Again, fruit and vegetable prices were a contributor, with a 22% annual increase in prices annually after a weather-afflicted summer growing season.
Foodstuffs said this week its costs to buy from suppliers had increased 7.4% annually.
The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index showed more than 6,500 items purchased by the co-operative had increased in cost in July 2023, the eighth largest number of items rising in cost since 2018.
“The number of items rising in cost in July was the largest monthly total since February 2023, and was nearly five times higher than in 2020,” said Infometrics Chief Executive and Principal Economist Brad Olsen.
The United Nations’ (UN) index, the FAO Food Price Index, rose in July, data released earlier this month showed.
The FAO Food Price Index average 123.9 points in July, increasing 1.3% from June but 11.8% below July 2022.
The UN’s Food and Agriculture Organisation said a sharp rise in the Vegetable Oil Price Index drove the increase. It rose 12.1% in June 2023 when compared to June 2022 after seven months of falling prices.
“International sunflower oil prices rebounded by more than 155 in the month, due mostly to renewed uncertainties surrounding the exportable supplies after the Russian Federation’s decision to end implementation of the Black Sea Grain Initiative. World prices for palm, soy and rapeseed oils increased on concerns over output prospects in leading producing countries.”
The FAO All Rice Price Index increased by 2.8% when compared to the previous month and rose 19.7% year-on-year to reach its highest nominal level since September 2011, the food agency said.
“This upward pressure of rice prices raises substantial food security concerns for a large swathe of the world population, especially those that are most poor and who dedicate a larger share of their incomes to purchase food,” it warned.
It said India’s July 20 prohibition of non-parboiled indica rice exports would amplify upward pressure already exerted on prices with seasonally-tighter supplies and Asian purchases.
FAO said export restrictions can bear adverse consequences on production, consumption and prices that last beyond the duration of their implementation and risk exacerbating high food domestic inflation in many countries.
The FAO Dairy Price Index declined by 0.4% in July and was now 20.6% below its July 2022 value.
“World cheese prices recovered slightly after steep recent declines as hot weather affected seasonally declining milk supplies in Europe.”
The FAO Cereal Price Index declined by 0.5% from June.
International wheat prices rose by 1.6% their first monthly increase in nine months, due to uncertainty over exports from Ukraine as well as continued dry conditions in North America, FAO said.
41 Comments
According to Truflation, U.S. inflation for food and bev running at 2.37% yoy. UK still up around 11.57%.
I wonder how much of the UK's food inflation is Brexit related? A decent chunk I would suspect..
To some extent, yes. For ex, Aldi's supply chain will be integrated better across the EU. Also, the most affordable retailer in the UK was going to be Russian brand Mere. But that's all been scrapped now.
"Grocery food prices increase by 11.9%"
I'm growing a little tired of the negative slant of the headlines on this site. This release contains the best news we've had on food price inflation in a long time. Yes, the levels are still very high on a year-on-year basis, but for once the direction is unambiguously down, rather than up. Let's wait, and hope, to see if it's the start of a trend.
The comments around agricultural commodity prices are valid, but we should keep in mind that the raw commodity prices are only a part of the price that consumers pay. (Food prices in NZ have continued to rise sharply this year in the face of declining commodity prices)
I don't think anyone's expecting food prices to return to January 19 levels within a month, or ever.
What matters is whether price increases return to a trend consistent with the RBNZ's inflation target. Food price inflation is currently one of the largest components pushing up the CPI, so if it moderates over the rest of the year it will be hugely 'relevant' for anyone who cares about rates.
Inflation could be at 3.1% and the headlines would still be something like "More needs to be done as Inflation still running hot, CPI not within rbnz target band" and the comments would be something like "oCr NEeDs tO go Up !" lmao it's just how this community operates
I find it is the consistency that is the problem.
Mine have ranged from immediately down the sink, to drinkable, to desirable. The best being a nice dry Alcoholic Ginger beer.
I do much less now, and drink less in general. My preference is a to just buy a nice imported German Dunkel or Belgian ale. But they are getting exceedingly hard to source.
New Zealand Customs Service would be in possession of huge amounts of data on the landed costs of imported food products. Huge amounts of what is sold in our supermarkets is produced offshore. When that product enters New Zealand the invoice details with price paid and freight charges is reported so import GST and Duty if any can be calculated. Products are classified according harmonised code system.
EG 2002.10.00 00B kg – Preserved Tomatoes, whole or in pieces and the statistical amount is recorded in kg
The vast majority of the product classified here would be tomatoes in cans. Duty free
So a relatively simple exercise (with access to the data set)to work out the landed cost per kg of preserved tomatoes. Get the % increase over time 2019 -2023 and see how that compares to percentage wise to say Countdown canned tomato that went from 80c to 1.40 per can in the same time. A 75% increase
Facts are inflation is still higher than any time in the last 25 years of course rates will stay around this level or higher. If you had bank stocks would be happy if they we’re giving out mortgages with rates under inflation level,the way NZD is going inflation will be here for a while.
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