PTT predicts more increases in food prices in the New Year

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Prices of foodstuffs will continue to rise in Finnish stores, even though prices on world markets have already descended close to the level from which they skyrocketed upwards from the end of 2006 onwards.
      In other European countries, food prices are already on the wane.
      However, the curve in consumer prices on the domestic market is still pointing upwards, as the price movements hereabouts have been less dramatic over the past year and a half than elsewhere in Europe.
     
Equally, the downturn in prices seems to come to Finland at something of a delay, but cost pressures on the price of meat and bread mean that it is likely instead that consumers will see prices edging upwards in the New Year, according to Perttu Pyykkönen of the Pellervo Economic Research Institute (PTT).
     
The year now coming to a close will go down in the record books as one of fierce increases in food prices.
      According to PTT estimates, consumer prices will rise this year by more than 8% from 2007 levels.
      The biggest increases have been seen in dairy products and eggs, up around 20%. Bread and meat products have risen in price by rather less than 10%, but as noted above, the New Year may well bring further hikes.
     
Statistics Finland notes that nearly all foodstuffs items, with the exception of fruit and vegetables, have gone up in price sharply in the course of the year.
      In September, the price of wheat flour was as much as 44% higher than 12 months previously, and figures for fat-free milk (+25%), rump steak (more than 22%), Emmental cheese (more than 16%), and mixed-grain bread (more than 8% up) tell their own story.
     
Consumer prices have been propelled upwards everywhere by the increasing cost of food and energy.
      Poor harvests, reductions in overproduction, the implementation of export restrictions, increased use of biofuels, and greater use of meat and dairy products in developing countries have all meant higher prices on the supermarket shelves, said Antti Suvanto from the Bank of Finland when the subject was discussed at a PTT seminar in Helsinki on Wednesday.


Previously in HS International Edition:
  Research institute predicts that upward pressure on food prices will lessen in 2009 (4.4.2008)
  Food prices expected to stabilise toward end of year (28.8.2008)
  Higher food prices bring longer breadlines (22.4.2008)

Links:
  Pellervo Economic Research Institute (PTT)

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