Last week, Stats NZ unveiled data indicating a notable decline in food prices, marking the most significant reduction in six years. This data precedes the second quarter consumer price index, expected to shed light on the inflationary pressures New Zealanders face, particularly in terms of food costs. Despite this decline, concerns persist regarding food security, affordability, and the nutritional quality of diets within New Zealand.
Long-term trends have shown a consistent rise in food prices, yet the changes in relative prices between different food categories often go unnoticed. These shifts play a critical role in shaping consumer choices, often at a subconscious level. The global increase in food prices since 2020, fuelled by the COVID-19 pandemic and geopolitical tensions, has seen a subsequent decrease in many countries, including New Zealand.
However, New Zealand's situation is unique, with price inflation remaining higher and more persistent compared to other developed nations. This has brought attention to the retail food sector's structure, primarily dominated by Foodstuffs and Woolworths, and the implications of limited competition on pricing. Additionally, New Zealand's fresh fruit and vegetable supply chain is highly sensitive to disruptions, such as extreme weather events, due to increased regional specialisation and a sparse transport network. International trade further influences the relative prices of different food types, highlighting the distinct composition of New Zealand's production and exports compared to its imports.
Source: theconversation.com