Global fertilizer and grain prices have plummeted since peaking last year, and gas and diesel prices have also fallen.
As laid out for lower food prices, in other words. Food prices in the world have also fallen for ten months in a row, according to the UN’s food price index.
But it is not visible on store shelves in Sweden. In January, food prices rose by almost 20 percent compared to the same month the year before, according to the latest inflation statistics from Statistics Sweden (SCB).
Better price abroad
Sweden stands out compared to neighboring countries. In Norway, food prices rose by 12 percent in January and in Finland and Denmark by around 15 percent, according to the respective countries’ statistical authorities.
Nor in the eurozone do food prices rise as much as in Sweden. Food inflation in the currency union was 14 percent in January (including alcohol and tobacco).
According to the experts, there is an important factor in Sweden’s food prices rising more.
— The weak Swedish krona. It gives an extra boost to food prices here at home compared to other countries, says Torbjörn Isaksson, chief analyst at Nordea.
Much of the food in Sweden is imported and a weak krone means that imported products become more expensive. This becomes particularly clear when it comes to fruits and vegetables, among other things.
But even the price of what is produced at home is rising by a weak krone, according to Torbjörn Isaksson.
— Even if things are produced and sold in Sweden, a Swedish producer always has the opportunity to sell abroad if the price there is better. Therefore, a weak krona also affects Swedish-produced food, he says.
Erik Glans, national economist at Konjunkturinstitutet, also sees the krone as the “probably most important” explanation for the price differences, although he adds that it is complex.
“The Swedish krona weakened against the euro by roughly eight percent from January 2022 to January 2023. Since many foodstuffs are traded internationally, you can expect a larger price increase the more the exchange rate weakens,” he writes in an email to TT.
But that doesn’t really explain everything.
More rigid in Norway
The Swedish Competition Authority has previously pointed out that the Swedish grocery trade is concentrated in a few players, which increases the risk of poorer competition. Then it will be easier to raise the price.
According to Torbjörn Isaksson, it is difficult to answer whether the companies have raised prices more than necessary. The Economic Institute found in a report last autumn that this was not the case.
— But I would still assess that earlier in 2022 there was a domestic price premium on inflation, because demand was so strong and profitability in business during the first part of 2022 was unusually good. It indicates that they have managed to parry cost increases, he says.
20 percent more expensive in January than a year ago. Archive image.
Like the Swedish krona, the Norwegian krona is also weak, but food prices have not jumped as much in Norway. According to Torbjörn Isaksson, Norway is a country that is difficult to compare with, because the Norwegian food market is more regulated and “rigid”.
— For example, they adjust the prices less often, so that comparison cannot be made directly. However, it is more relevant to compare with Denmark and Finland. And the Swedish krona has lost a lot against both the euro and the Danish krona, he says.
More expensive in the UK and Germany
However, Sweden is not the worst. Another European country where food prices are skyrocketing at about the same rate is Germany.
However, Marcus Widén, an economist at SEB with a special interest in inflation, does not think that one should pull too big changes in a single month.
“January in particular can be an opportunity when many companies look through their books and review their pricing,” he says.
He also does not think that Sweden stands out particularly from a European perspective, and points out that it may be worth seeing how inflation has been over a longer period of time.
In a compilation he made of how much food prices have risen on average during the period July 2021 to January 2023, Sweden ends up behind both Germany and Great Britain.
— Sweden is high, but not the highest. In this context, a couple of percentage points here and there is not much to say either. But it is close at hand to blame a lot on the exchange rate, says Marcus Widén.