Expensive fruit and veges due to poor weather says grower, economist says inflation won't last forever

A Kiwi grower says out-of-season vegetables like tomatoes have been extremely expensive lately due to the lack of sunshine in Aotearoa.

But one economist told Newhsub rampant inflation will be just a memory by the middle of next year. 

The cost of food rose 12.5 percent since last June, driven by a 12.8 percent increase on grocery foods - particularly eggs, yoghurt and cheese.

Overall, Tatauranga Aotearoa/Statistics NZ found food prices jumped 1.6 per cent from May to June.

Meanwhile the likes of tomatoes and lettuce drove fruit and vegetable prices up 22 per cent year-on-year..

Tomatoes, being a summer fruit, aren't cheap in winter.

Anthony Tringham from Curious Croppers says there are a few reasons for that.

"Tomatoes are expensive, because they're bloody hard to grow in winter," he told Newshub.

He added they're especially hard to grow without sun, which Aotearoa hasn't seen much of in the past year.

Anthony Tringham from Curious Croppers.
Anthony Tringham, director at Curious Croppers. Photo credit: Newshub.

According to Tatauranga/Statistics NZ, in May a kilogram of tomatoes cost $8.20.

In June, the price almost doubled to $15.10 a kilogram.

"Inflation has made everything expensive. So labour's gone up, energy's gone up, fertiliser has gone up - it makes everything more expensive whether you like it or not," Tringham said.

Fertiliser and energy costs rose sharply following Russia's invasion of Ukraine in February last year.

Meanwhile, in February this year, Cyclone Gabrielle devastated some of our most productive farming regions, wiping out hectares of produce in one go.

This perhaps explains why the cost of fruit and veg is still rising - one of the key drivers of inflation at the moment.

"Food price inflation is still running at 12 and half percent per annum which is stronger than it has been for the last couple of years. So household budgets [are] still being squeezed when you go to the supermarket," said Gareth Kiernan, chief forecaster at Infometrics.

Gareth Kiernan, chief forecasters at Infometrics.
Gareth Kiernan, chief forecaster at Infometrics. Photo credit: Newshub.

Despite that, there's still some optimism.

"A lot of those other underlying inflationary pressures through the domestic economy - in the construction sector for example, through parts of hospitality, and where the labour market is very stretched," he said.

"Some of those pressures are starting to ease."

That's partly why Te Pūtea Matua/The Reserve Bank left the official cash rate at 5.5 percent on Wednesday - which gave some mortgage holders relief and signalled inflation pressures are starting to ease.

But it won't be quick.

"Households are still going to find conditions reasonably tough through the next 12 to 18 months," said Kiernan.

Tomatoes might drop in price even quicker than that - as long as the weather plays ball.

"More sunshine equals more tomatoes," Tringham said.

Here's hoping for more sunshine.

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