Food inflation remains steady with a few exceptions


Thursday, 31 July, 2025

Food inflation remains steady with a few exceptions

Annual inflation for the ‘Food and non-alcoholic beverages’ sector has remained steady at 3% for the past five quarters, according to the latest quarterly Consumer Price Index (CPI) data from the Australian Bureau of Statistics. The key exceptions are as follows:

  • Snacks and confectionary products are up 5.5% in the past 12 months related to increases in input costs for chocolate.
  • Egg prices are 19.1% higher compared to 12 months ago due to supply shortages following avian flu outbreaks. 
  • Non-alcoholic beverage prices increased further due to higher prices for coffee, tea and cocoa, up 9.4% in the past 12 months.
  • Higher coffee prices were due to adverse weather conditions impacting the supply from major overseas coffee bean-growing areas.

RaboResearch senior food retail analyst Michael Harvey said despite the easing in retail food price inflation seen in the latest quarterly data, food price inflation was still running above the 10-year average, “indicating persistent cost pressures in the food ecosystem”.

Harvey said lamb prices were 12.1% higher year-on-year, but the rate of inflation had slowed when compared with the March quarter (19.7%).

Cooking oils, cereal products and seafood were the only three categories to post deflation (price declines) for the quarter on a year-on-year basis.

“But there will be a ‘watch’ on cooking oils for Australian households,” Harvey said, “as this category includes butter, and global butter prices are hovering at or near record levels again and likely to put upward pressure on local prices given Australia is a net importer of butter.”

Fruit and vegetable prices rose 4.6% in the 12 months to the June quarter, but this was down from a 6.6% annual rise in the March quarter. “This is a sign of more stable seasonal growing conditions,” Harvey said.

Milk and cheese prices were stable following two consecutive quarters of deflation previously.

Top image credit: iStock.com/автор

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