Chris Quin: Foodstuffs North Island Managing Director on the latest Food Price Index
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What does the latest Food Price Index reveal about food prices?
I think we've got good news on inflation here via the price of food. So the food price index is, I'm sure you're aware, 1% for May, 3.2% for the year. The 3.2% is the key because it's close to the RB band. So Chris Quinn is the Foodstaff's New Zealand Managing Director and he's back with us. Chris, morning to you.
Good morning, Mike.
Am I getting overly excited here? Because, I mean, obviously 3.2% is more than zero and we want zero. I get all that. But it's not as bad as it was going to be. The war was going to scuttle us.
I think that's exactly right, Mike. It's less than probably everybody feared and less than maybe we planned or thought might come as a result of what's happened in the Middle East. We saw our retail store prices across our locally owned stores up about 2.6% a month. So that's an assuring number. We know there's a pressure still on our suppliers, particularly for materials, things like trays and plastic and things like that that are affected by fuel costs. And the issue is how slowly they flow through the market. But even when we look at that, you know, our look forward, we're somewhere in that two to three percent mark at the moment.
Yeah. But with the oil price with a seven in it this morning, that's almost immediate. And within a week or two, your fuel's going down and fuel's a major component of what you do with food, isn't it?
It's a major component of transporting food, but it also goes into the manufacture of a number of the items, so trays, plastics, packaging. Depending on what the item is and how it's put together, that has an effect that's probably still coming because it started so late in the chain. But we're also a little bit looked after in New Zealand because we make so much food locally. So what we're seeing in terms of where the opportunities are, it's more locally grown products. Where the pressures are on products we export and we get great returns for those, which is good to see. So your red meats, those sort of products are still inflated and high, but that's because of global competition. That's a good news story.
Do you reckon if I wandered down aisle seven and rounded up 12 people and said, yes, I hate the cost of a steak, but you know why this is, would they know that and get that or not?
I hope so, and I think it's been talked about really openly and sensibly that this is a great part of New Zealand's economy, that we're able to export and earn these returns, and that because we're an open trading country, we pay what the world pays. But it's never easy. This has been a very tough five years for households on food prices. Sure, absolutely.
But I think things are starting to settle a bit. Chris, appreciate it. Chris Quinn, Foodstuffs New Zealand Managing Director.
How are fuel costs affecting food supply and prices?
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