Margules Groome’s quarterly harvest and haulage cost index for Australian plantation operations is based on actual price indexation mechanisms used by industry weighted by volume harvested. The previous index published in June 2020 showed a massive fall in fuel prices, some 29%, due to the impact of the COVID-19 pandemic control measures on fuel demand. The impact on harvest and haulage cost index then was equally massive, down 7% and 9% respectively. Then it was predicted that the index will shift back to normal well into 2021, if not later. Sure enough, after a false start in the September quarter of 2020, fuel prices began recovering in early 2021. Increases in CPI and wages indices to above pre-pandemic levels in nominal terms have contributed to pushing harvest and haulage cost indices back towards pre-pandemic levels.
Fuel prices still have some way to go to get back to pre-pandemic levels. Currently, at ~AUD1.22-1.26/L, they were at ~AUD136-140/L in December 2019. We know this leap could occur quickly – within a quarter or less. Nonetheless, one would assume that as economies continue their recovery fuel prices will also continue increasing pushing the harvest and haulage costs higher.
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