Figure 1: Australian Harvest & Haulage Cost Index September 2022, 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 the industry, weighted by volume harvested (Figure 1). The previous index published in July for June 2022 indicated that fuel price rises will continue through September as the Russia-Ukraine war drags on and Russian trade sanctions continue. This has prediction has fortunately proven incorrect with fuel prices actually decreasing in the September quarter of 2022 providing some relief from the sharp logistics cost increases experienced earlier in the year. However, with the Federal Government having re-imposed the full fuel excise from late September the reprieve will be short-lived.
Prices generally are continuing to rise as shown by CPI increases (+7.3%/a in September). Cost of living pressures is also forcing wages higher. With the economy generally recovering strongly post-pandemic but still beset by capacity constraints, high inflation is likely to be a significant factor until the end of 2022. The harvest and haulage cost index reflect the decline in fuel price rises but continuing increases in CPI and wages. Up ~1% in the September quarter of 2022, far less than the ~5% increase in the June quarter of 2022. These indexes are still in record-high territory in nominal terms. In real terms, however, the cost spike in 2008 remains higher, and may not now be exceeded (Figure 2).
Figure 2: Australian Harvest & Haulage Cost Index September 2022, Real
Sources: ABS, Margules Groome