Fruit, vegetable prices increase by 10pc in one year
National warns rising costs, not just food, hurting Kiwis
Fruit and vegetable prices have shot up by 10 per cent in only a year. And food prices overall were 7.4 per cent higher last month compared with July 2021.
New Stats NZ food-price data has revealed more about how much Kiwis have been paying for groceries and how inflation was tracking.
The latest recorded annual increase was due to rises across all broad food categories that Stats NZ measured.
Compared with July 2021, overall grocery food prices rose 7.5 per cent and restaurant meals and ready-to-eat food prices increased by 6.6 per cent.
The data arrived at a time of high inflation and major debate about the cost of living.
Meat, poultry, and fish prices increased 7.7 per cent. Nonalcoholic beverage prices rose by 4.6 per cent.
“Increasing prices for cheddar cheese, standard two-litre milk, and yoghurt were the largest contributors within grocery food,” Stats NZ consumer prices manager Fiona Smillie said.
The stats are prone to seasonality — with some individual items liable to volatile pricing depending on agricultural nuances, freak weather events or supply chain issues.
Tomato prices have been high lately, with prices frequently above $13/kg today.
The biggest culprits in food price inflation for the year were fruit and vegetables.
“Vegetables had the largest impact on this increase, influenced by higher prices for tomatoes, lettuce, and broccoli,” Smillie said.
Stats NZ said after adjusting for seasonal effects, fruit and vegetables were up 3.1 per cent.
The agency added: “This indicates that whilst seasonal impacts drove most of the movement, after removing these impacts fruit and vegetables still increased by 3.1 per cent.”
The second-largest contributor to the monthly movement was
grocery food, which rose 1.0 per cent overall.
Cheddar prices increased 4.5 per cent, and were the biggest drivers of inflation on this category.
Eggs also soared, up 4.2 per cent in the year ending July 31.
ANZ Bank chief economist Sharon Zollner said the food price index only told some of the story about the real cost of living.
Food prices were notoriously volatile in the short term or on a seasonal basis. Tomatoes, for example, were always pricey in winter, she said.
And wage growth, house prices and interest rates were also crucial indicators of whether people were better off in real terms today than a year ago.
Consumers’ price index inflation rose 7.3 per cent in the year to the end of June — but wage inflation was about 7 per cent too.
“Food prices are outpacing wages but not by a lot,” Zollner added.
And with house prices falling, and other indicators that inflation had peaked, there was room for optimism. But people still waiting for wage increases and those on lower incomes were especially exposed to inflation and food price increases, she said.
In June compared with May, prices for meat, poultry, and fish rose 0.9 per cent. Non-alcoholic beverage prices rose 1.4 per cent in a month.
And the country’s overall cost of living has been rising at the fastest pace in 32 years.
The National Party said families were having to fight runaway food prices.
“Rising prices in every part of the economy are crashing over household budgets, dragging Kiwis backwards,” National’s finance spokeswoman Nicola Willis said.
“Yet after more than a year of runaway inflation, Labour still has no plan to tackle rising prices to get the cost of living crisis under control.”
Willis added: “We know labour shortages are worsening food inflation in particular.”
She said producers, manufacturers, and the hospitality sector were hurting from “Labour’s failed immigration strategy” which blocked access to talent and drove up costs.
Willis, also National’s deputy leader, said the Reserve Bank should focus on price stability and the Government must stop adding unnecessary costs to businesses.
Green Party commerce spokesman Ricardo Mene´ndez March, said an inequality crisis existed and people needed support now to access nutritious food.
Meanwhile, one of the two major supermarket chains said that it was rolling back prices to what they were in early 2021.
Foodstuffs said butter at 2021 pricing was the most popular item at the Pak’nsave, New World and Four Square stores.
The company claimed its customers had saved $13.8 million on the “rollback” products nationally.
“In May, the co-operatives rolled back prices to what they were in early 2021, immediately reducing prices by an average of 10 per cent on more than 110 everyday items, as record inflation continued to push up food costs,” Foodstuffs said.
“In the four months since the rolled-back prices began, the cost of groceries supplied to Foodstuffs from its suppliers has increased by an average of 7.9 per cent.”