Kiwis still grappling with high food prices: Stats NZ

Highlights

• Food prices in New Zealand are 10.7% higher on a y-o-y basis
• Grocery was the largest contributor to New Zealand’s food inflation
• The second-largest contributor was the fruit and vegetable segment

Stats NZ released its food price index (FPI) for 2022 today (13 December 2022). According to the data released, food prices were 10.7% higher in November. The FPI is a measure of changes in food prices for NZ households.

Grocery was the largest contributor to the increase. Grocery prices were led by Kiwi staples like cheddar cheese, yogurt, and standard two-litre milk. The second-largest contributor to the annual movement was the fruit and vegetable segment, up 20% on a year-on-year basis. The price of onion was up 28%, the potato was up 10%, and kiwifruit was up 26%.

On a year-to-year basis, the prices increased by

• Grocery food prices increased by 10%
• Fruit and vegetable prices increased by 20%
• Restaurant meals and ready-to-eat food prices increased by 8.0%
• Meat, poultry, and fish prices increased by 12%

• Non-alcoholic beverage prices increased by 7.8%

On a monthly basis, prices of foods were flat in November 2022 compared to October 2022.

Prices of all other food groups also rose in November. A 1% monthly rise in groceries was the most significant contributor to the upward movement of the prices. According to the report, even fruit and vegetable prices, which usually fall in November in New Zealand, did not fall as much in November as they usually do. In fact, after adjusting for seasonal effects, fruit and vegetable prices rose 0.9%.

However, tomato prices dropped 42%, broccoli prices were down 44%, and strawberry prices were also down 35%. An important reason for this outcome was also the weather conditions. Weather caused large-scale disruptions to farmers, particularly with a wet autumn, farmers struggled to protect crops.

In New Zealand, weather conditions impacted virtually every region, and the impact was nationwide. Further, spring frost in October hit the blueberry crop and caused damage to kiwi fruits and apricot trees, according to the report. Other factors that have impacted the prices also include rising commodity prices and wage inflation. Further, labour shortages and other macroeconomic factors also impacted food prices.

October prices

Food prices for October jumped 0.8%. Even in October, the biggest contributor to the annual increase was grocery items, up 9.7%, followed by fruit and vegetables. It was the biggest annual increase since November 2008, Stats NZ reported. Even monthly food prices were higher and more broad-based in October 2022.