Imported food products are increasingly competing with locally produced goods in New Zealand, with economists pointing to factors including energy costs, labour costs, seasonality, and international supply dynamics.
Imported frozen vegetables and fruit juice products are among the categories currently available at lower prices than some domestic alternatives. This week, the lowest-priced frozen spinach available was packed in Belgium using local and imported spinach, while frozen baby carrots were also imported.
Westpac chief economist Kelly Eckhold said transport costs are not always the main factor determining retail prices. He noted that energy costs can affect products that require intensive processing, including fruit juice.
The lowest-priced one-litre fruit juice product available at Woolworths on Tuesday was a Keri juice product made from imported ingredients.
Eckhold added that around one-third of fruit and vegetables consumed in New Zealand are imported, partly reflecting seasonal supply patterns.
ANZ agricultural economist Matt Dilly said imports of frozen vegetables have increased, creating competition for local growers.
"New Zealand doesn't really have the cost-of-labour advantage or the cost-of-energy advantage. There's also a lot of tropical fruits and whatnot that we don't do a very good job of growing ourselves," he said.
"That's the counterpoint to all the great agricultural exports we have. Some things we don't have a competitive advantage in, and we do import them."
Otago University senior lecturer Robert Hamlin said rising agricultural land values have contributed to higher food production costs in New Zealand over recent decades.
"And the primary driver of that has been the building up within this country of the value of agricultural land," he said.
Hamlin also pointed to the country's exposure to international commodity markets due to the large share of agricultural production exported overseas.
"New Zealand is really rather unusual in that it has such a very large proportion of its agricultural production going into this international market for food," he said.
According to Hamlin, the international food market remains volatile because supply and demand are closely balanced globally. He warned that disruptions in major importing countries could rapidly influence food prices in export-oriented markets such as New Zealand.
"But what it boils down to is that we are a high-cost producer and we are a higher cost producer than an awful lot of the major producers around the world, and therefore you will find out from time to time that food that is produced in this country can be accessed for a considerably lower price overseas than it can be accessed here," he said.
Source: RNZ News
