Grocery prices in Australia are expected to increase as higher fuel costs affect production and logistics across the food supply chain.
Ritchie's CEO, Fred Harrison, said suppliers are already applying fuel levies. "We have suppliers who are putting on a fuel levy, and we are absorbing that," he said. "Prices are stable right now, but if this continues, prices will rise in the next two to three weeks."
Price increases of at least 20 per cent are anticipated over the coming months, with fresh produce, meat, and dairy among the affected categories. According to NSW Farmers economist Sam Miller, this may only be a starting point as fuel costs influence both production and transport. Transport can account for up to one-third of total costs for products such as onions, strawberries, mushrooms, kiwifruit, and pears, with price increases of around 10 per cent expected for these items.
Fuel costs are also affecting input markets. The Middle East supplies a large share of global urea used in nitrogen fertiliser, which is applied in crop production, including wheat and vegetables. Rising fertiliser and fuel costs are adding pressure across production systems.
In the dairy sector, producers have indicated that price adjustments may be required. A two-litre bottle of private label milk, currently priced at $3.20 (US$2.10), could increase by $0.60 (US$0.40). Industry representatives have requested price increases to offset higher input costs.
Australian Dairy Farmers president Ben Bennett said, "Cows must be milked every day, milk must be collected every day, and it must reach processors and consumers quickly."
Farmers report diesel prices exceeding $3 per litre (US$1.97), increasing operational costs. Supply chain participants are also adjusting logistics pricing, with higher transport charges reported.
Retailers have indicated efforts to limit cost pass-through to consumers, although market conditions remain dependent on fuel and input cost developments. Government measures, including fuel excise adjustments, have been introduced to manage price pressures.
Industry stakeholders note that continued disruptions to global energy supply chains could further affect production costs, logistics, and pricing across the food sector.
Source: Daily Mail
