Flood, Fuel & Fertilizer Cost Pressure Drives Retail Pricing Inflation

Thank You

Flood, Fuel & Fertilizer Cost Pressure Drives Retail Pricing Inflation

With increases to supply chain costs driven by COVID and the outset of conflict in Ukraine, it is unsurprising that inflation has reached retail pricing of Australian horticulture. For the March quarter, retail prices vs 2021 were up on average 2.48%, for for fruit and 11.21% up for vegetables on the previous year.

Crop losses due to wet conditions through the quarter across the Eastern seaboard have been a major driver for vegetable retail pricing inflation. Of these, flooding events in January and in early March affecting southern Queensland and northern New South Wales have been some of the most damaging in decades with crop losses reported in the most affected regions.

While it is likely that vegetable availability increases in the coming months as we move to unaffected crops, additional inflationary pressures are likely to persist for some time, particularly for fertilizer and fuel.

According to Austrade, the average Free On Board (FOB) price of imported fertilizer rose by 128% through calendar year 2021. In total, the costs of fuel and fertilizer has been estimated to represent 21.6% of total costs for cropping activity.

Due to the continuing Russia-Ukraine conflict, exports of key oil and fertilizer input commodities have been disrupted. As the largest exporter of nitrogen based fertilizer and the second largest exporter of the world’s oil, disruptions due to sanctions have seen shortages globally. This is likely to see extended high costs of production for horticultural products affect retail prices as this conflict continues.

With inflationary pressures likely to affect pricing for production of horticultural commodities, up to date pricing information will be essential for businesses trading within these supply chains to adapt to future volatility. Contact Freshlogic today to find out more about fruit & vegetable pricing.


Share This Post

Related Posts

infographic Australian monthly mortgage repayments from May to August 2022 with image of Melbourne in background

$550 extra per month mortgage shock for households

Cost of living increases are mounting for Australian households, anchored on record-level interest rate rises over the last four months. The RBA increased the cash rate to 1.85% last week, creating the fastest set of rate increases since 1994. These

Read More »
infographic Australian Single households 2016-2021 up by 17.2% and average weekly shopping trips down 3.7% with image of Sydney as background

Single-person households up 17.2%, shifting retail buying

Single-person households were up 17.2% between 2016-2021, with more Australians living alone according to the latest release of the Australian census. This figure significantly outpaced the national household increase of 11.9% and family households at 10.7%, with Australian single-person households

Read More »
Work from home reducing CBD and increasing suburban and retail fruit and veg sales image person working at computer with coffee and diary

WFH locked in & set to impact HH food buying

Work conditions are now in the employee’s court with skills in high demand and unemployment at record lows. This is reflected in WFH at home evolving into a 2 day a week norm. Clearly commuting time can be better invested,

Read More »
Scroll to Top