Cost of household staple that increased 20 per cent set to jump again
Step into any supermarket and you can buy a grinder full of black pepper for less than $5. But the household staple is set to become more scarce over the next 18 months, and while Aussies won't have any problem finding it on shelves, prices are already increasing for wholesalers.
Ian Hemphill, the founder of the iconic Aussie brand Herbie's Spices, is paying 20 per cent more for pepper than he was five months ago. But it's a problem he expects to see with the various spices he purchases because they are agricultural commodities that can be impacted by the weather.
A key reason for the price increase is a lack of rain where the crop is primarily harvested — India, Vietnam and Sri Lanka.
'The main thing that will affect pepper is when you get a poor monsoon,' Hemphill told Yahoo News. 'When you get a good monsoon, you'll have a spike of green pepper corns that look like a luscious bunch of grapes, but when it's poor, you have fewer berries forming.'
Related: Pepper grinders sold at supermarkets have major problem
There have always been fluctuations in the spice trade, which merchants lovingly refer to as the 'world's second oldest profession'. In the late 1990s, vanilla plantations in Madagascar were hit with severe storms, and the farm-gate price jumped by 1,300 per cent over two years.
Experts at the independent think tank, the Climate Council, expect consumers in Australia to face more fluctuations in grocery prices as the climate continues to warm and traditional weather patterns destabilise.
Its economist Nicki Hutley predicts significant and permanent increases in costs as weather patterns change. This could mean growing more crops in hothouses, embracing lab-grown meat, or raising animals in sheds rather than paddocks.
'We're going to have to get smarter around farming. But this doesn't necessarily mean groceries will be cheaper, in fact it will be the opposite,' she said. 'We'll still get a lot of volatility. You can't grow everything in a greenhouse at the scale we need.'
Extreme weather events are a constant around the world. After the March floods, Queensland alone is believed to have lost more than 100,000 head of livestock. At the same time, parts of Victoria, NSW, South Australia, Western Australia and Tasmania are experiencing record-breaking drought, forcing farmers to hand-feed their animals with hay and grains, which are surging in price.
Sadly, the problem is set to get worse. Countries like Australia and the United States are continuing to extract fossil fuels from the ground. Australia just approved an extension of its second-largest fossil fuel project in history, the North-West Shelf, which is set to release billions of tonnes of carbon-like emissions into the atmosphere over its lifetime.
The world could reach 2 degrees of warming above pre-industrial levels in just 15 years, making droughts, floods and cyclones more severe and frequent than they are today.
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But there are other factors also expected to contribute to price fluctuations. Pepper continues to be the world's most traded and consumed spice, and demand remains constant.
Despite technology advances in other farming sectors like viticulture and wheat, pepper continues to be mostly picked by hand. And in the long-term, Hemphill believes its price will be impacted by increasing labour costs.
Other price influences will be harder to predict. For instance, Hemphill has seen a surge of interest in pepper because it's a key ingredient in turmeric, a power that's been embraced as a popular health drink in Australia.
Another factor that doesn't affect the farm-gate price but increases the cost to merchants is shipping. Due to recent conflict in the Middle East, the price of importing a container to Australia has more than doubled.
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