According to independent institute Pellervo Economic Research (PTT), food prices in Finland will increase this year and next year, owing to increased food production costs and a rise in demand.
The increasing popularity of vegetarian diets and Finland's unusually hot and dry summer also contributed to increasing food prices.
According to PTT's agricultural and food economy forecast, the price of food will increase this year by 1.9 percent and next year by 2.2 percent.
Mirroring EU situation
Increasing grocery prices are also reflected in other parts of the European Union. However, in other EU countries, food prices already started to rise a year earlier than in Finland.
Food prices in Finland are expected to go up in all categories, with the price of meat products increasing for the first time in four years.
According to the PTT, the cost of dairy products in particular will also creep upwards in the beginning of 2019.
Vegetable prices increased during the summer owing to the unusual heatwave in Finland that caused drought and decreased vegetable supply, while at the same time demand for vegetables increased as consumers have reduced the amount of meat that they eat.
Rise in costs goes to consumer
PTT said the rise in food prices is being caused by growing costs in the food chain and production. Previously those increases couldn’t be passed on to the consumer because demand was weak.
Last year the situation changed as consumer demand for food grew -- those cost increases in food production will now be shifted to consumers
According to PTT, food production costs will continue to rise this and next year, with one of the key reasons being the reduction in the supply of feed grain owing to this summer's drought.
Number of new products on rise
Finnish food exports are expected to decline this year, especially for dairy, pork and grains.
Yet, at the same time the demand for domestic products has increased, which supports the homegrown food industry.
According to the PTT's forecast for 2019, Finnish food exports and imports will start to grow again.