Experts: Food prices will continue to rise next year


This has been the year as people have generally become aware of what things really cost in the grocery store. The industry is witnessing new buying patterns, with the hunt for extra prices and more and more people turning to discount chains. The trend has grown stronger as food prices have ticked up, month by month, throughout 2022. While inflation as a whole stood at 11.5 percent in November, food prices had increased by 18.1 percent compared to the year before. The expensive food is largely connected to increased electricity and energy prices. Even bottlenecks that have remained since the pandemic have come into play. And unfortunately, according to several experts, most things say that food prices will continue to rise even in 2023. “We have not seen the end of this. We know that there are some lead times which mean that many companies may not have fully raised prices yet, so the price increases may continue for a while into the new year,” says Jörgen Kennemar, commodity analyst at Swedbank.The high electricity prices are coming not suddenly going lower just because we’re entering a new year. On the other hand, most analysts expect that the rate of price increase for food will eventually level off. Also things like the price of artificial fertilizer and how the harvests turn out come into play, as does the currency. If the Swedish krona continues to weaken, imported food will become more expensive.” Although the rate of increase will slow down eventually in 2023, we will still see rising prices. In the near term, there are no price drops to count on, with the exception of certain product groups,” says Jörgen Kennemar. According to HUI’s forecast, food prices will increase by 8.5 percent in the full year of 2023, compared to 2022. According to the analyst firm, the biggest increases will come in the first half of the year. “The rate of price increase will be significantly higher at the beginning of 2023. We expect double-digit growth figures for the entire first half of the year,” says Joakim Wirén, analyst at HUI. In the second half of the year, HUI expects that the rate of increase will slow down and drop down to zero.Because food prices have rose so sharply this autumn, the comparative figures will be high in a year’s time. That food prices would rise by a further 18 percent from current levels is not likely. However, neither Joakim Wirén nor Jörgen Kennemar believe that food prices would fall because of this compared to this year. On the other hand, certain product categories that have increased significantly may decrease in price, Joakim Wirén mentions coffee as an example. “At the end of 2023, we expect that food prices are 20 percent higher than they were in 2021,” he says. The Institute of Economic Research (KI) makes a slightly different assessment. In its latest forecast, the authority expects food prices to fall slightly in 2023. “Prices should stop rising at the rapid rate they have been doing. If we’re lucky, they can also start to drop a little,” says Erik Glans, national economist at KI. According to a food price index from the UN, food prices fell globally in November to the lowest level since January. According to Bloomberg, the reason is falling prices for wheat and corn.But commodity prices is not everything.”The prices of agricultural raw materials play a big role in store prices, but also other production costs such as wages, electricity, transport costs and prices of packaging come into play,” says Erik Glans and continues: “We will get higher wages next year, it will keep the prices up a bit. On the other hand, it is offset by the decline in certain commodity prices. This means that we will end up with prices overall falling very slightly in 2023.” Jörgen Kennemar sees two scenarios that must occur in order for the inflationary pressure on food to fall back. They are that we get good harvests and that it becomes more difficult for the companies to raise the price when consumer demand is now declining.” This can cause inflation to lose momentum. And that is probably also the purpose of the tough monetary policy that we are seeing now. If the labor market, which has been robust up until now, also declines, it could cause household demand to decline even further,” he says.

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