Certainly.
When we published Canada's Food Price Report in December, we were expecting an increase of anywhere between 5% to 7%. Given what has gone on so far in 2022, we are expecting the 7% threshold to be surpassed essentially because of the invasion of Ukraine.
I would probably point to two major factors.
First, we did start the year with this COVID hangover affecting supply chains. What a lot of people may not appreciate is that, as soon as efficiencies of supply chains are affected, it tends to cost more to move products around, whether that's on water or on land. That's exactly what's been going on. Variants have actually impacted the economies around the world at different times and in different ways.
Planning, predicting and forecasting in logistics have been very difficult and challenging for companies. That's why it's costing more to do anything right now. That's the one big factor.
The other big factor, obviously, is the war. Let's face it—that particular region is so critical to global agriculture. It does produce a lot of grains, as I mentioned, but it's the reaction to the war that is really going to cost way more, I think—the sanctions on Russia.
Also, what we're slowly seeing is nations panicking. We saw a few weeks ago Indonesia banning exports of palm oil. That's going to have a huge impact on vegetable oil as an ingredient, and vegetable oil is in everything we eat. It's impacting food service and food retail. Right now, already, we're seeing prices increase there. That's going to have a huge impact on most food categories.
Today, we just learned that India is banning exports of wheat. As I mentioned in my opening reports, wheat represents basically 15% of all calories consumed in the world, so we're going to be way short on wheat. Even if Canada and the U.S. have bumper crops this year, we're going to be seeing many people around the world suffering from hunger, unfortunately. In Canada, we are expecting prices to rise significantly—way beyond 7%, unfortunately.