While overall headline inflation eased in the latest quarter, the annual rate of food price inflation held fast at 3.3 per cent, the latest quarterly Consumer Price Index data from the Australian Bureau of Statistics, has shown.
The September 2024 quarter data saw overall annual food price inflation – comparing prices with the September 2023 quarter – remain at the same rate (3.3 per cent) seen in the June quarter. Quarter-on-quarter, prices in the ‘Food and non-alcoholic beverages’ category rose 0.6 per cent.
RaboResearch senior food retail analyst Michael Harvey said the annual rate of food price inflation was “still higher than average”, with the 10-year average tracking at 2.7 per cent.
Mr Harvey said a spike was seen in annual price inflation for fresh produce (both fruit and vegetables), overall at 8.6 per cent. However, he said, this needed to be seen in the context of a “weak comparable” in September 2023, when prices were down (-6.4 per cent) on the previous year.
“For the September 2024 quarter though, the ABS does cite higher prices for berries, grapes, tomatoes and capsicum contributing to the rate of inflation in this category due to unfavourable growing conditions,” he said.
“However, with the summer season now approaching, we are starting to see good volumes and lower prices in some fruit and vegetable products.”
There was though some good news for consumers when it came to food prices, Mr Harvey said, with a general moderation in inflation across many key categories – including bread, spreads and condiments – and some “limited price deflation” (lower prices) in categories, including beef and veal and cheese.
“For dairy, there has been promotional activity in the cheese category which has been a driver in some of the lower pricing seen here,” he said. “And it is expected lower retail milk prices we have seen on some supermarket shelves in recent weeks will come through in the December quarter CPI data.
“And while butter is not a specific item measured in CPI data, consumers are paying higher prices for butter as record high global butter prices are felt in supermarket shelves here, and with Australia a sizeable importer of butter,” Mr Harvey said.