Australians are enjoying relief from rising grocery prices across supermarket shelves, but a leading expert says there’s still “sticker shocks” that shoppers should be aware of in 2024.

Figures released this week from the ABS showed that food inflation was running at 3.3 per cent, far below the peak of 9.2 per cent in December 2022.

Rabobank senior food retail analyst Michael Harvey said that’s welcome news for shoppers, though inflation is still above the decade average of 2.7 per cent.

“[Food inflation] has been heading in the right direction, but it’s taking a very long time,” Harvey said.

“We’re still not below long-run averages, so that gives you an idea of the stickiness [in prices] that we’re seeing.

“We broadly still expect food inflation will continue to ease, but there will be risks in certain categories.”

Red meat

Harvey said price pressures remain for a number of groceries, including eggs, cooking oils (especially olive oil), chocolate, and some red meats.

That warning comes as consumers enjoy some relief from high red meat prices over recent years, with prices for lamb and beef falling by 10.9 per cent and 3.6 per cent respectively in annual terms over the June quarter.

“Prices bottomed out [in livestock markets] last year, but they’ve picked up a bit since then.

“That potentially puts some upwards pressure on retail prices, but we’re not expecting markets to rally back to where they were.”

Fresh produce

The good news for fresh fruit and vegetable prices is that the peaks seen in 2022 and 2023 are over.

But the prices for some products are experiencing inflation, including grapes, strawberries, blueberries, tomatoes and capsicums.

It was enough to increase fruit and vegetable prices by 3.7 per cent in annual terms over the June quarter, Harvey said.

“It confirms the volatility in that category; it’s been up and down … in the past two years” he said.

Moving forward, there is a risk that Australia experiences higher rainfall with another La Nina on the radar, which could affect prices.

Cooking oils

Prices for cooking oils rose 11.5 per cent annually over the June quarter on the back of strong global commodity prices for those ingredients, and a poor harvest of olives.

“It’s the vegetable oil complex, everything around palm oil, soy oil, sunflower oil and then locally, olive oil,” Harvey said.

“Most vegetable oil prices are very high [and] if they stay high for long enough, it flows through to consumer products.”

Eggs

Egg prices rose 6.5 per cent in annual terms over the June quarter, following an 8 per cent lift in the preceding March quarter amid ongoing shortages in supermarkets due to a bird flu outbreak.

Major chains including Coles and Woolworths have placed buying limits on eggs to prevent customers from panic buying.

Harvey said there is still “upside risk” in egg prices from here, particularly if the bird flu outbreak worsens.

Chocolate and confectionery

For the chocolate/confectionery category, there may also be some price pressure ahead with higher global cocoa and sugar prices still flowing through the system.

Rabobank is also predicting some price pressure for products like chocolate and confectionery on the back of higher global cocoa and sugar prices.

Harvey said that while the heat has come out of global commodity markets more broadly, cocoa and sugar prices remain high.

“There is a risk of further inflation from here,” he said.