November 22nd, 2024
The food price index in New Zealand has witnessed a steep rise, reaching a level not seen since September 1987, according to figures released on Thursday by Stats NZ. In comparison with April 2022, food prices were 12.5% higher in April 2023.
"The 12.5% annual increase in April 2023 was the largest since September 1987, which included the introduction of GST in 1986," stated James Mitchell, Consumer Prices Manager at Stats NZ.
The upward trend in the annual increase was observed across all broad food categories measured by Stats NZ. The details of the increases compared with April 2022 are as follows:
Grocery food prices increased by 14.0%
Fruit and vegetable prices rose by 22.5%
Restaurant meals and ready-to-eat food prices increased by 9.0%
Meat, poultry, and fish prices saw a rise of 9.5%
Non-alcoholic beverage prices grew by 8.0%
Mitchell explained that the primary drivers for the spike in grocery food prices were barn or cage-raised eggs, potato chips, and 6-pack yoghurt, echoing the trend from the previous month.
The second-largest contributor to the annual movement was fruit and vegetables, with the increase primarily driven by tomatoes, avocados, and potatoes.
In terms of monthly changes, food prices in April 2023 rose by 0.5% compared to March 2023. After adjusting for seasonal effects, they were up 0.8%. Restaurant meals and ready-to-eat food increased by 1.7%, making them the largest contributor to the monthly food price increase.
"Higher prices for dining out and takeaway coffee drove the increase in restaurant meals and ready-to-eat food," Mitchell added.
Food price index over the past thirty-six years
Historical data shows that the food price index annual percentage change has been quite volatile, with peaks and troughs aligning with wider economic trends and policy changes. The current rise, however, stands out for its sharpness, matching levels last seen in the late 1980s.
In an in-depth analysis of the food price index over the past thirty-six years, from January 1987 to April 2023, striking trends and notable fluctuations have been observed.
The data shows a somewhat tumultuous journey of the index, marked by spikes, dips, and periods of stability. The highest surge in the food price index was witnessed in July 1987, when it soared to a remarkable 18.1%. However, this period of high food inflation was short-lived, and the index took a deep dive to 4.7% by October of the same year.
The following year, 1988, saw a gradual stabilisation of the food price index, with the annual percentage change maintaining around the 5% to 7% range. This was, however, followed by a period of increase in 1989, reaching a peak of 12.4% in September.
The early 1990s saw a gradual decrease in the annual percentage change, even dipping into negative territory in September 1991 with a -0.6% change. This negative trend continued until 1992, after which it steadily climbed back into positive figures.
The food price index remained relatively stable in the low single digits throughout the late 1990s until the early 2000s. However, a sharp increase was noted in the index in 2008, reaching a peak of 10.8% in September, reflecting the global economic crisis's impact on food prices.
Post-2008, the index witnessed several fluctuations, with noticeable peaks in 2011, 2016, and 2019, where it reached 7.9%, 10.6%, and 7.9% respectively. The decade of 2010-2020 was characterised by dramatic shifts in the food price index, reflecting the changing global economic landscape and its impact on food prices.
As of the latest data point, in April 2023, the annual percentage change in the food price index stands at 12.5%. This indicates a significant increase compared to the previous years, warranting close monitoring to understand the implications for consumers and the broader economy.
This historical data underscores the inherent volatility of food prices and the various factors influencing them, including climate change, global trade policies, and economic shocks. The trend analysis serves as a critical tool for policy-makers in understanding these dynamics and planning mitigating strategies.