Woolworths warns poor growing conditions may constrict supply

Soaring prices for key fruit and vegetables that have already put a rocket under grocery prices and the nation’s inflation rate could worsen heading into winter as poor growing conditions marked by heavy rain and low sunlight further strangles supplies of supermarket essentials.

And the new pain for household budgets could be around lettuce and berries.

In a newsletter to Woolworths shoppers sent out on Thursday, the nation’s largest supermarket group warned that the supply of fruit and vegetables had been impacted by poor weather conditions.

While the email sent by Woolworths general manager of fruit and vegetable Paul Turner did not mention price rises, it has been poorer supplies of key basket staples this year that has sent inflation racing in Australia and squeezed household budgets.

Analysts and economists have already warned this year that food price inflation is primed to accelerate, with suppliers approaching the biggest retailers, such as Woolworths and Coles with multiple requests for price rises that could push shelf prices to an annual rate of more than 12 per cent.

This is being driven partly by the lack of supply of key groceries and has delivered a massive uplift in inflation. Last month the ABS released its latest inflation figures for the March quarter that showed grocery inflation running at 5.3 per cent, which contributed to a breakaway overall inflation rate for the quarter and spurred the Reserve Bank to lift official interest rates.

The supermarkets have already begun to pass on price hikes from suppliers to customers, with Woolworths recently reporting shelf price inflation of 2.7 per cent and Coles 3.3 per cent.

In an email to Woolworths shoppers Mr Turner warned that growing conditions had not been favourable.

“With winter around the corner, the eastern seaboard begins to look to northern growing areas for fruit and veg supply as the southern regions get cooler. However, after consistent rainfall and low sunlight across northern NSW and southeast, central and northern Queensland in recent months, the supply of fruit and veg has been impacted,” Mr Turner wrote.

“I want to let you know what’s been most affected and what’s still in abundance at great value, right now.”

Mr Turner said the recent flooding pushed back the planting of Cos and Iceberg lettuce, causing a delay to regular growing conditions.

“You may notice short supply and an impact on price in the short term until normal stock levels return in around four weeks, depending on weather conditions. Additionally, our pre-packaged spinach leaf salads have been hampered by heavy rain, however, growth and quality are already improving and will only get better over the next few weeks.”

Berry suppliers were also impacted, he said.

“With the southern berry season winding down and the Queensland season delayed due to weather impacts, you may notice strawberries and raspberries aren’t as plentiful. Quantities will be much better once the Queensland season picks up around late June.”

However, there’s some good news for shoppers, with “excellent quality early season Hass avocados” set to hit the market, Mr Tuner said.


Extracted from The Australian

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