The impact of conflict in the Middle East is showing up in pressure on food prices as expected, three months after the conflict broke out, Infometrics says.
But whether it eases now that fuel prices have fallen a bit remains to be seen.
Infometrics has released its latest grocery supplier cost index, which shows what suppliers charge Foodstuffs supermarkets.
Costs went up 2.1% but there was a more widespread range of higher costs, chief executive Brad Olsen said.
"As had been expected, a large number of cost adjustments stemming from conflict in the Middle East have finally landed, with June 2026 seeing the fifth highest number of monthly cost changes since 2018, across a variety of products.
"Only half of the increases recorded in June were directly attributed to fuel adjustments, meaning there is still some persistent underlying breadth to cost increases recently. Importantly, evidence to date suggests that the magnitude of these cost increases has been more limited than might have been first expected, which has limited the size of cost increases across various products."
Month on month, more than 6900 products increased in cost from May to June. About 6500 of those were smaller than 20%.
"Around half of these increases were directly due to fuel adjustments stemming from earlier fuel price increases," Olsen said.
Olsen said it was hard to predict the outlook from here.
Oil prices have increased again as tensions have escalated. "There's definitely a bit of pressure that's come back on but there's also pressure that's still come back off. It's tricky to know where it lands.
"It might be that yes, you've got some continued cost pressure and it's a bit broader, but it might not be as intense as we first feared. Although that's highly conditional on what's coming through from overseas."
He said he was surprised that fuel prices had not increased more than they had this week.
"Last time you had this many region-wide missile and drone attacks we were over $US100 ($NZ173) a barrel. At the moment the market's barely getting to $US80.
"I guess the worry would be things like fertiliser costs which are probably not hitting quite as directly right at the moment, they're still likely to be elevated maybe not as high as they first were but elevated in the second half of this year which is likely to be when we're buying more."
Supplier costs rose across all departments in June compared with the previous year, although cost declines for beer saw liquor cost increases slow back.
"Larger increases for a number of fruits, fish fillet and shellfish, and fries, hashbrowns, and berries saw larger average increases across produce, seafood, and frozen departments respectively. Although bread costs dropped slightly, various canned and packaged grocery department goods saw cost increases, including canned tuna, packaged milks, noodles, and bottled sauces."
Stats NZ will release official food price data this week.
This story was first published on rnz.co.nz |  |
