THE CONSUMER PRICES of food have risen to their highest levels in some time during the coronavirus-disrupted first half of the year in Finland.
Statistics Finland’s consumer price index shows that the consumer prices of grocery items and non-alcohol beverages crept up by 2.4 per cent year-on-year between May and June. Food prices have thereby risen by 1.8 per cent since the beginning of the year.
Consumer prices on average stayed unchanged in June.
The coronavirus pandemic may have prompted the public to panic-buy food and created uncertainty in the global food market, but it has not had an impact on the consumer prices of food in Finland, summarised Hanna Karikallio, the acting research director of agriculture and food industry at Pellervo Economic Research.
“One could’ve thought that food prices would’ve risen even more in April. In March, people stocked up on food and possibly caused extra costs to the industry and retailers,” she said.
She pointed out that berries and fruits are one of the few product categories where prices have crept up due to the pandemic, as producers have struggled to bring in seasonal workers to their farms in Europe. The prices of berries and fruits surged by 11 per cent year-on-year in May and 8.6 per cent in June.
“The increase in berry and fruit prices also partly explains the increase in food prices this summer,” she said.
A longer-term trend that has been driving up food prices is the increase in meat prices. Karikallio explained that the prices have crept up due to growth in exports to China, where local food production has been affected by the African swine fever.
Meat products were 2.3 per cent more expensive than one year earlier in June, according to Statistics Finland.
While the recent tax increase on soft drinks is another possible contributing factors, food prices are on the increase even when soft drinks are excluded from the comparison. Along with berry, fruit, meat and vegetable prices, the prices of cocoa, coffee, sweets and tea increased considerably in June.
The upward trend is expected to continue in the autumn as a consequence of the fuel tax hike that entered into effect on 1 August.
Karikallio also expressed her doubts that other grocery retailers will respond to the price reduction campaign announced last week by Lidl: “Lidl wants to be the most affordable grocery chain in Finland. Others don’t need to respond to this competition,” she said.
What about the much-dreaded second wave of coronavirus infections?
“The harvest seasons have succeeded relatively well, and we now know how to prepare for the coronavirus. Since the coronavirus didn’t unsettle the food chain in the spring, I don’t think it’ll do that now either,” she replied.
Aleksi Teivainen – HT
Source: Uusi Suomi