As communities across south-east Australia continue to be impacted by widespread flooding, Treasurer Jim Chalmers says the price of fruit and vegetables is expected to rise.
Mr Chalmers said the recent flooding disaster in parts of Victoria, New South Wales and Tasmania will lift prices by around eight per cent over the next two quarters.
“That’s based on the impact of previous flooding on some of our prime agricultural land,” he said during a press conference on Friday.
The preliminary modeling ahead of next week’s federal budget predicts the floods will detract around 0.25 per cent from GDP growth in the December quarter.
“What we’re seeing in these flood-affected communities will be felt over the December quarter and the March quarter,” the treasurer said.
“We know these natural disasters have come at the worst possible time for farmers and for Australians who are already under the pump.”
But he said it was too early to put a precise price tag on the floods.
“This is just an initial estimate, and the costs could be even more significant,” he said.
Australian Treasurer Jim Chalmers. Source: AAP / LUKAS COCH/AAPIMAGE
AUSVEG, the peak body for Australian vegetable growers, said it’s too early to predict the impact of the floods on consumer prices.
But it said there would be short-term logistical challenges, along with possible medium to long-term impacts on the availability of some crops going into summer.
What produce might be affected?
Shaun Lindhe, a spokesperson for AUSVEG, said assessing weather events such as flooding involving what grows in an affected region.
“If we think back to earlier in the year, we saw some price increases for vegetable commodities that would ordinarily have come from the southern Queensland region, which is where the floods in those regions impacted,” he told SBS Finance Editor Ricardo Gonçalves.
He said the recent event has particularly impacted northern Victoria, which is mainly a fruit-growing area – produce like apples and pears, plums, nectarines and peaches.
“It’s a major fruit growing region for Victoria and does supply fruit through the east coast and rest of Australia as well,” he said.
“So if there’s any sort of availability or supply gaps coming from that region, it will likely impact the supply of products.
“Given the supply and demand nature of the fresh produce sector, that will impact price.”
Will this affect fruit and vegetable prices?
With some farms in affected areas still underwater, Mr Lindhe said we can’t yet assess the regional impact on crops – and, therefore, price.
In the short term, he said logistical challenges through the supply chain, such as road closures, would impact getting products to consumers.
“But in terms of the different availability of crops into the medium term, it’s still a bit of a wait and see at the moment,” he said, adding there may be other weather events that impact crops in different production regions.
“At the moment, it’s still an ongoing situation; we still have farms that are underwater. So it’s a bit too early to be able to give that prediction as to the impact on the price for consumers.”
In a statement to SBS News, a Woolworths spokesperson said as the significant weather event unfolds, it is “in contact with our suppliers and growers in Northern Victoria to understand the impact and how we may be able to support them.”
“Our thoughts are with all communities who have been affected by the current flooding.”
A spokesperson for Coles also said it is supporting farmers, suppliers and local communities affected by floods and is “working closely with them to minimise any potential impacts on supply.”
– with AAP