NZ food prices keep going up

Te Whanganui a Tara - Food prices rose 0.4 percent last month and after seasonal adjustment, they were up 0.9 percent, Stats NZ says.

The food price index measures the changes in prices that households pay for food. Key areas were:

• fruit and vegetable prices fell 0.1 percent (up 3.9 percent after seasonal adjustment)

• meat, poultry, and fish prices rose 1.0 percent

• grocery food prices fell 0.1 percent (down 0.1 percent after seasonal adjustment)

• non-alcoholic beverage prices rose 1.8 percent

• restaurant meals and ready-to-eat food prices rose 0.6 percent.

In the last year to the end of September, food prices jumped 8.3 percent. Comparing the last 12 months:

• fruit and vegetable prices increased 16 percent

• meat, poultry, and fish prices increased 6.7 percent

• grocery food prices increased 7.7 percent

• non-alcoholic beverage prices increased 4.8 percent

• restaurant meals and ready-to-eat food prices increased 6.9 percent.

The war in Ukraine has created energy supply disruptions, impacting food and electricity prices, as well as consumer sentiment, Stats NZ says.

Since Russia’s invasion of Ukraine, the effects of energy supply disruptions are cascading across everything from food prices to electricity to consumer sentiment.

Energy price shocks have caused rising global inflation and tighter monetary conditions, slowing global growth.

Sustained food shortages and high prices could send millions into acute food insecurity, heightening social unrest.

Many OECD countries have tapped into their strategic petroleum reserves in response to the crisis, potentially causing a deficit and increasing prices in 2023.

Since Russia’s invasion of Ukraine, the effects of energy supply disruptions are cascading across everything from food prices to electricity to consumer sentiment.

The annual price of crude oil is forecasted to average $93 per barrel equivalent in 2022⁠. By comparison, during the 2008 and 1979 price shocks, crude oil averaged $127 and $119 per barrel, respectively.

What distinguishes the 2022 energy spike is that prices have soared across all fuels. Where price shocks were more or less isolated in the past, many countries such as Germany and the Netherlands are looking to coal to make up for oil supply disruptions. Meanwhile, European natural gas prices have hit record highs.

Global food prices have also spiked. Driven by higher input costs across fuel, chemicals, and fertiliser, agriculture commodity prices are forecasted to rise 18 percent in 2022. Fertiliser prices alone could increase 70 percent in part due to Russia’s dominance of the global fertilizer market—exporting more than any country worldwide.

Oil feeds into nearly everything, from food to smartphones. In fact, the price of oil influences as much as 64 percent of food price movements.