A leading economist warns the price of some sweet treats and fruit and vegetables is still on the rise as New Zealanders continue to battle a cost of living crisis.
The latest Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) has seen another increase in July - rising 7.5 percent from last year
But a silver lining is that increase is lower than what we were seeing at the start of the year when double-digit increases were seen.
The index tracks how much supermarkets are charged to buy the goods they put on the shelf.
Infometrics principal economist Brad Olsen told AM Early on Monday the likes of cakes and chocolate have led the way for price increases, which he puts down to international pricing pressures.
"Bakery items had the largest month-to-month increase coming forward. A lot of that being driven by the likes of sweet items and cakes and similar reflecting some of the international pricing pressures that are coming on," he said.
"Alongside that, we've seen continued growth in a lot of other grocery items, the likes of higher costs for eggs and similar have been well traversed. But in the most recent month, we saw a large increase in the supply costs of chocolate, again driven by some of those international pricing pressures."
Another item that was on the rise was fruit and vegetables, particularly tomatoes, salad greens and apples.
Olsen puts that down to seasonal factors, the atrocious weather conditions which damaged crops and also high costs for producers.
"You've still seen a lot of those higher cost increases over time for producers themselves. The likes of horticultural producers, for example, we know the input costs on farm have risen about 20 percent over the last year or two on average," Olsen said.
"A lot of that has been continuing to push forward. That's been raising supply costs and we expect that when Stats NZ comes out with their data later this week, they'll also be showing that high pressure on food prices consumers are paying when they're going to the supermarket."
A common staple in the pantry is rice and Olsen didn't have good news for Kiwis.
He told AM Early host Nicky Styris India has banned exporting some rice products because local prices had been increasing too much.
With India being the second-largest producer of rice, Olsen believes it's only a matter of time before prices increase in New Zealand.
"Those sort of decisions we've seen before in the likes of vegetable oil markets. It might not affect us immediately but again, having a reduction in the supply of rice globally... will eventually come through and hit our prices as well."
A lot of that isn't good reading for Kiwis, especially when the latest data from Stats NZ last month showed annual food prices are continuing to soar, up 12.5 percent in June 2023 compared to June 2022.
And Olsen didn't have good news for New Zealanders, with July being the fifth month in a row that monthly costs of groceries rose roughly triple the rate of pre-pandemic prices.
"That is causing a lot of worry and concern. We saw 6500 items that increased in cost in the month of July. That was the largest number that was increasing in costs since February," he said.
"The only good news in some sense, is when we look through those figures, is that this is also the fifth month in a row where those cost increases have moderated. So they're still going up, but they're going up at a less frantic pace than they had before."
Watch the full interview with Brad Olsen in the video above.
