Fruit, vege prices climb 10% in just one year
Rising costs throughout economy, not just food, hurting Kiwis, say Nats
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-toeat food prices increased 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. Non-alcoholic beverage prices rose by 4.6 per cent.
“Increasing prices for cheddar cheese, standard 2-litre milk, and yoghurt were the largest contributors within grocery food,” said Stats NZ consumer prices manager Fiona Smillie.
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 above $13/kg.
The highest inflation for the year was seen in 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.
Wage growth, house prices and interest rates were also crucial indicators of whether people were better off in real terms today.
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.
Our economy, like that of the United States, was juggling strange trends lately — low unemployment, high inflation, falling house prices and stagnant population growth.
Zollner said the Reserve Bank would keep watching major indices to assess if more rate hikes were needed.
“Basically, we need inflation to come down quickly, otherwise interest rates are going to have to go up more.”
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 fighting 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 widespread 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. Labour shortages must be addressed and Government spending reined in.
Green Party commerce spokesman Ricardo Menndez March, said an inequality crisis existed and people needed support now to access nutritious food.
Meanwhile, one of the two major supermarket chains said 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.”
Foodstuffs NZ managing director Chris Quin said: “We estimated this initiative would save customers about $500,000 each week, so it’s been fantastic to see the actual savings come in at over double that.”