Food Prices Drop in New Zealand, but Inflation Risks Loom Amid Middle East Tensions
Source: The DairyNews
Food prices in New Zealand, particularly for cheese, butter, and ice cream, witnessed a decline at Foodstuffs stores in December, with many vegetables experiencing a drop of over 30%. However, despite the positive trend, there is growing concern about potential inflationary pressures due to escalating tensions in the Middle East.
Stats NZ's Food Price Index (FPI) reported a 4.8% increase in food prices in December compared to the previous year. In contrast, data from Foodstuffs revealed that prices at their 500-plus stores increased by 4.3% on average in December year-on-year.
Chris Quin, Managing Director at Foodstuffs NZ, sees the decline in the official rate of food inflation as a positive sign for the year ahead. He attributes the success to the efficiency and strategic buying practices of locally owned Foodstuffs stores.
The data from Foodstuffs Co-ops' stores indicates significant year-on-year reductions in prices, including a 14% decrease in 1kg blocks of Pams cheese and a 16% decrease in Pams 500g blocks of butter. The produce department experienced the most substantial declines, with courgettes and tomatoes dropping by 52% and 43%, respectively.
Quin attributes the lower prices to ample sunshine leading to good produce supply during the summer. However, he cautions that geopolitical tensions, particularly in the Middle East, could pose a risk to inflation. The potential disruption in supply chains due to attacks on container ships using the Suez Canal and Red Sea may lead to increased shipping costs and delayed delivery times.
Despite the challenges, Quin assures that Foodstuffs is working to mitigate potential impacts. The company is proactively replenishing stock earlier than usual to address potential supply gaps, signaling its commitment to ensuring a stable supply chain in the face of external challenges.
He emphasizes the value of having a strong New Zealand-owned grocery retailer, citing Foodstuffs' ability to leverage offshore networks and bulk buying power to secure supplies during crises. Despite the potential increases in shipping costs and other challenges, Foodstuffs aims to absorb the additional costs to maintain stability in the market.
Chris Quin, Managing Director at Foodstuffs NZ, sees the decline in the official rate of food inflation as a positive sign for the year ahead. He attributes the success to the efficiency and strategic buying practices of locally owned Foodstuffs stores.
The data from Foodstuffs Co-ops' stores indicates significant year-on-year reductions in prices, including a 14% decrease in 1kg blocks of Pams cheese and a 16% decrease in Pams 500g blocks of butter. The produce department experienced the most substantial declines, with courgettes and tomatoes dropping by 52% and 43%, respectively.
Quin attributes the lower prices to ample sunshine leading to good produce supply during the summer. However, he cautions that geopolitical tensions, particularly in the Middle East, could pose a risk to inflation. The potential disruption in supply chains due to attacks on container ships using the Suez Canal and Red Sea may lead to increased shipping costs and delayed delivery times.
Despite the challenges, Quin assures that Foodstuffs is working to mitigate potential impacts. The company is proactively replenishing stock earlier than usual to address potential supply gaps, signaling its commitment to ensuring a stable supply chain in the face of external challenges.
He emphasizes the value of having a strong New Zealand-owned grocery retailer, citing Foodstuffs' ability to leverage offshore networks and bulk buying power to secure supplies during crises. Despite the potential increases in shipping costs and other challenges, Foodstuffs aims to absorb the additional costs to maintain stability in the market.
