Many people are already feeling the squeeze, with cost of living pressures creating strain for household budgets. Photo: 123RF
There's a warning that tariffs being implemented by the United States could lead to higher food prices in New Zealand.
Stats NZ said on Tuesday that food prices lifted 3.5 percent in the year to March.
That was the biggest increase in more than a year, but is still well below the peak in 2023 when prices were rising by double-digit percentages.
The biggest contributor to the March increase was the grocery food group, and meat, poultry and fish.
Food prices were lower for fruit and vegetables.
Milk prices increased 16 percent while butter prices increased 63.6 percent in the 12 months to March this year.
Chocolate prices were up almost 5 percent coming into Easter and up 16 percent over the year.
"The average price for a 250g block of chocolate was $5.99 in March 2025, that's $1.60 more expensive than three years ago," prices and deflators spokesperson Nicola Growden said.
Foodstuffs managing director Chris Quin said global supply and demand, as well as geopolitical events, were a big influence on food prices.
"World Bank data shows food commodity prices are still more than 25 percent higher than five years ago, in March 2020, when the Covid crisis began, and now we have a new challenge in the form of a trade war between China and the US," Quin said.
"Our co-ops' logistics teams say shipping costs, which have been favourable into New Zealand over the past year have now reached the bottom and likely to go up.
"Uncertainty in trade due to the new tariffs will likely have consequences, with schedules disrupted and shipping costs rising.
"Until now, China and the US have been buying billions of dollars a year of each other's food exports.
"Hefty tariffs mean those goods are now likely to be diverted elsewhere. How that affects our customers remains to be seen - it could push some food prices up and others down."
Quin said there was pressure on butter, cheese and milk prices due to global demand for milk solids.
"Lamb leg prices were up in March too, thanks to strong offshore demand but also as a result of the difference in the timing of Easter this year."
Kelly Eckhold, chief economist at Westpac, said tariffs would be one factor that would impact the global trade trends but it was not likely to be a dominant factor for New Zealand food prices.
"A more important factor will be what happens to the New Zealand dollar exchange rate given most food items are tradable goods," Eckhold said.
"A weaker NZ dollar has been a factor driving up food prices. Offsetting this could be weaker global demand which could weigh on commodity prices. On balance its hard to tell the net impact right now."
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