Half a cabbage now costs $5 as food prices soar to a 13-year high. Photo: 123RF
Food prices are at a 13-year high with economists and supermarket boss blaming war, wages and weather.
Latest data from StatsNZ data showed food prices have risen by 8.3 percent in the year to September, maintaining the annual increase recorded in August - the highest since the Global Financial Crisis in 2009.
ANZ economist Finn Robinson said a raft of local and international factors were behind the increasing costs.
He said the Russia-Ukraine war has led to global increasing food costs, added to challenging local growing conditions.
"Usually, we can expect to see fruit and vegetable prices falling quite a bit as we get into spring and summer, but that just hasn't happened as much as you'd usually expect to see," he said.
Fruit and vegetable prices were up 16 percent year on year, he said, and rising labour costs and a weakened NZ dollar were also adding to cost pressures through the food supply chain.
"We were about $0.70 to the US dollar in 2021, now that's down to about $0.56, last time I looked."
He said inflation-driven higher wages were also adding pressure to businesses.
Infometrics chief forecaster Gareth Kiernan had previously said demand needed to be "reined in" to improve stretched resources across the economy.
Foodstuffs North Island chief executive Chris Quin said the company, which runs New World, Pak'n'Save and Four Square supermarkets, was struggling to keep food prices down.
He said supermarket returns were about the same as most competitive markets in the world, but food price inflation was the highest it had been for a long time.
However - as shipping costs drop and the Reserve Bank hiking the rate of interest - Robinson hoped to see prices easing off.
He expected to see annual inflation slow to 6.6% in Q3 in next week's consumer price index data, down from 7.3% in Q2.
"We are seeing signs that inflation has probably peaked - there's the sliver lining for you."
Economic consultancy Infometrics forecast the country's official cash rate would hit 4.5 percent early in 2023.
