Business Environment Profiles - Australia
Published: 29 August 2024
Domestic price of vegetables
136 Units
2.3 %
This report analyses trends in the domestic price of vegetables, measured by the consumer price index for vegetables. The index has a base of 100.0, with 2011-12 designated as the base year. The data for this report is sourced from the Australian Bureau of Statistics and represents an indexed price of vegetables as they are available for consumer purchase. The index is the average indexed price of vegetables over each financial year.
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IBISWorld expects the domestic price of vegetables to drop by 0.9% to reach 135.7 index points in 2024-25. Vegetable growers rely in large part on seasonal overseas workers to harvest their crops. Staple winter vegetables include potatoes and onions, whilst popular spring and summer crops include capsicum, tomatoes, beans and cucumber. The production of vegetables is projected to expand into the latter part of 2024-25 on account of dropping irrigation costs, favourable weather and more vegetable planting. These factors are set to culminate in a heightened supply, leading to a slight drop in prices despite high production costs stemming from steep fertiliser prices associated with the longevity of the Russia-Ukraine war.
The domestic price for vegetables has skyrocketed climbed over the last five years. The first price increase came from initial supply constraints emanating from the bushfires across the nation and the impact of COVID-19 in 2019-2020. The continuing pandemic-induced issues with the supply chain further pushed prices up through 2020-21. Then, in 2022-23, transportation expenses rose as a flow on effect of rising fuel prices, taking vegetable prices with them.
The level of annual rainfall is a primary driver of vegetable production volume, which correlates strongly with vegetable prices due to its influence on production yields. Building on this, however, are a range of other influences. Demand from export markets influences domestic prices. Rising export demand shifts prices upwards in overseas markets, encouraging producers to sell vegetables to export markets rather than locally. This constrains local supplies, increasing lifting the domestic prices of vegetables at the retail level. Additionally, consumer health consciousness impacts vegetable consumption and prices. This has been on the rise as more Australian consumers focus on health, which comes about with more marketing efforts like the 2024 OMA healthy eating campaign focused on promoting better food choices in favour of healthy vegetables. The growing consumption has led to heightened prices. Overall, IBISWorld forecasts the domestic price of vegetables to grow at a compound annual rate of 2.34% over the five years through 2024-25.
IBISWorld forecasts domestic vegetable prices to reach 131.7 index points in 2025-26, a 3.0% drop...
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