Soaring food inflation looks likely to continue next year

food inflation

New Zealand’s food inflation is already soaring. The current situation is not good, and the outlook’s probably even worse.

Stats NZ says food price inflation in New Zealand jumped 8.3 percent year-on-year in August 2022.

All food categories gained annually: fruit and vegetables (16 percent), grocery food (7.7 percent), meat, poultry & fish (6.7 percent), restaurant meals and ready-to-eat food (6.9 percent) and non-alcoholic beverages (4.8 percent).

Increasing prices for yogurt, two-minute noodles and tomato-based pasta sauce were the largest drivers within grocery food.

The second-largest contributor to the annual movement was fruit & vegetables; the items within this group that influenced this movement the most were capsicums, tomatoes, and broccoli. Month-on-month food prices increased by 0.4%.

Food charities

A new survey of 43 food charities from around the country has revealed that the demand for food support continues to skyrocket, as a result of the long-lasting impacts of Covid-19 and the ever increasing cost of living.

The New Zealand Food Network (NZFN) ran the survey to ask the food hubs it works with about their experience with food support between January and June 2022.

The results found that the top three reasons for requesting food support were low household income due to low paying jobs (79%), unemployment (70%), and Covid-19 isolation (60%).

International impact

International reports show food inflation is a problem stretching from the UK to New Zealand.

In the UK, for instance, a senior economist is warning “daunting” food inflation in the UK could soar to between 17 and 19 percent next year.

According to the Office for National Statistics, food inflation in the 12 months to September hit 14.6 percent.

That increase is significantly higher than overall consumer price index inflation, which was 10.1 percent.

James Walton, chief economist at the Institute of Grocery Distribution, has warned MPs that the worst is yet to come.

“Consumer food price inflation is currently around 15 percent,” Walton said.

“This is as bad as it’s been to date – but we do think it will go further.

“Today, we’ve issued a new forecast… [we expect it] will probably peak in the first part of next year, between 17 percent and 19 percent … that is a fairly daunting prospect.

“We think that inflation will start to dissipate over the course of 2023, but it will still be above zero by the end of the year.”

Walton also warned “food stress” is no longer an issue which is primarily facing those on lower incomes.

“Food stress is becoming increasingly prevalent in the UK,” he told MPs.

“Not just amongst the least well off households, but actually amongst households further up the income ladder.”

Last week, a YouGov poll revealed that one in six Britons are not confident they can afford to feed their families.

Young people are the age group struggling most the rising cost of groceries. Twenty-six percent of 18-24 year olds say they are borrowing money to afford food bills.

The news is on a sorry downward slope.

In September, the Food Foundation warned one in five families are facing food poverty.

New prime minister Rishi Sunak and chancellor Jeremy Hunt are coming under pressure amid the rising prices.

They are expected to provide more cost of living support when they deliver their autumn statement next week.

“Food stress is becoming increasingly prevalent in the UK.

“Not just amongst the least well off households, but actually amongst households further up the income ladder,” Walton says.


Additional reading

News category: New Zealand.

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