Hikes in the prices of grain, meat and dairy products can inflate an average Finnish household's grocery bill by up to 500 euros this year, a fresh report by the Natural Resources Institute Finland (LUKE) has forecasted.
In a press release, the institute noted that the average price of food is expected to rise by as much as 10 percent in 2022 compared to last year's levels.
According to LUKE senior researcher Hanna Karikallio, the rising prices will also affect consumers' purchasing behaviour, forcing them to seek cheaper products within the same group or completely different alternatives.
Food costs have already been rising over the first few months of this year, with coffee, fish and vegetables prices increasing at a rapid rate and gaining up to a third and more.
The spike in prices has been ascribed to the towering energy prices, the ongoing conflict in Ukraine, as well as massive sanctions, which while designed to cripple Russian economy, effectively disrupted established supply chains across the globe.
While Finland in particular is largely self-sufficient when it comes to grain production, last year's poor harvest has led to a dependence on imports to make up for insufficient domestic production.
Furthermore, a decline in the domestic production of cereals and oilseed products has in recent years led to an overreliance on imports from Russia. Last year Over a third of Finland's soybeans, rapeseed oil and sunflower oil came from Russia. As imports of these products ended in March, though, shortly after Russia's special operation in Ukraine, Finland was forced to look for more expensive alternatives.
LUKE also identified the spike in fertilizer costs as having a direct knock-on effect on the productivity and profitability of Finnish farms
“The income of agricultural businesses is quite sensitive to changes in the prices of products and ingredients. The most sensitive are cereals, oilseeds and protein crops”, LUKE researcher Jukka Tauriainen said, as quoted by national broadcaster Yle.
As a result, the average hourly wage of a Finnish farmer is expected to drop to about 7.10 euros this year.
Worldwide, pundits and organisations have been ringing the alarm bells about a nascent global food crisis, driven by the conflict in Ukraine, as both Russia and Ukraine are key importers of grain. So far, the price of commodities such as cooking oil as well as cereals such as maize and wheat soared to record high levels worldwide.