Figure 1: Australian Harvest & Haulage Cost Index March 2023, Nominal
Sources: ABS, AIP, Margules Groome
Margules Groome’s quarterly harvest and haulage cost index for Australian plantation operations is based on price indexation mechanisms used by industry, weighted by volume harvested (Figure 1). The previous index for December 2022 an increase in fuel price as a result of the Federal Government having re-imposed the full fuel excise from late September. But the fuel price increases in the December quarter did not translate to an increase once tax credits and GST were considered, but a decrease. As a result, the harvest and haulage index plateaued. In March fuel prices decreased rapidly and continues to do so in April/May. Consequently, the harvest and haulage index turned downwards – a welcome relief to many.
Inflation as measured by CPI continued to be a significant contributing factor supporting the harvest and haulage index at relatively high levels, countering the drop in fuel prices. Increasing wages are also contributing in this respect. However, with inflation moderating/falling, capacity constraints on the supply side continuing to lessen, and economies adjusting to the energy shock caused by the Russia-Ukraine war, expectations are the harvest and haulage cost indices will continue to fall in 2023. In real terms, it seems the cost spike in 2008 will remain the high point (Figure 2).
Figure 2: Australian Harvest & Haulage Cost Index December 2022, Real
Sources: ABS, AIP, Margules Groome
For further information and analysis contact Margules Groome.