Thank you, Mr. Chair.
Thank you to the committee for the opportunity to speak today.
Previous speakers spoke about energy markets. I will be speaking about food security.
I'd like to make three points in relation to the global food security consequences of the Russian invasion of Ukraine. These comments are based on my own research as an academic, as well as in my role as a member of several international expert panels on food security.
The first point I'd like to make is that world food security has been profoundly affected by the decline of Ukrainian grain on the world market. Russia's illegal invasion of Ukraine caused significant turmoil in global grain markets, resulting in a major price spike in 2022 that was sparked by concerns about global grain supplies—especially because, at the time, Russia and Ukraine together accounted for around one-quarter of the world's wheat export market and around one-fifth of the world's maize market.
As a result of this market turmoil, food import bills rose sharply around the world, especially in the months following the invasion, and these price increases hit the food import-dependent developing countries the hardest. These are especially countries in sub-Saharan Africa and the Middle East. Many of these countries relied on imports of grain from Russia and Ukraine to meet their food security needs.
The result of this turmoil and price increase was a dramatic increase in global hunger. After a decade in which we saw hunger generally falling around the world, the situation reversed after 2019. The pandemic was certainly a significant reason for the increase in hunger, but so was the war in Ukraine. The UN estimates that, globally, around 122 million more people faced hunger in 2022 than in 2019, and that around 20 million to 30 million of the people facing hunger today—a total of around 800 million people—are facing hunger because of the war in Ukraine.
Global grain markets today have largely adjusted to the initial shock, and the prices of wheat and other grains have since receded from their high levels of 2022, but they still remain elevated and, given high levels of debt and rising interest rates, the global hunger situation remains highly precarious.
The second point I'd like to make is that the Black Sea grain deal has been important, but its end has not led to further market turmoil, at least not on the same scale that we saw before. The brokering of the Black Sea grain initiative in July 2022 eased some of the market fears by allowing the safe export of some of Ukraine's grain via Black Sea shipping routes. This deal is widely seen to have contributed to a decline in grain prices between mid-2022 and mid-2023. Some of that grain, but not all, went to the poorest countries in need. In July of this year, Russia pulled out of the Black Sea grain deal. Wheat prices briefly rose but have since come down again, although the world wheat market remains tight.
Ukraine is now exporting much of its grain via the Danube River, and it has established its own humanitarian corridor through the Black Sea. Ukraine has pursued these alternate routes of export because its overland shipments, which occurred in the immediate aftermath of the invasion, flooded the markets of its neighbours—Poland, Hungary, Slovakia, Romania and Bulgaria—which prompted those countries to ban the import of Ukrainian grain because it was depressing prices in their markets. Throughout this market turmoil, Russia has doubled its global grain exports since 2022. Russia is now the largest wheat exporter in the world, and it has captured some of the markets that Ukraine had previously supplied.
The third point I'd like to make is that Canada can play an important role in this context by supporting developing countries that depend on food imports for their food security. Canada's humanitarian assistance and exports of wheat to world markets have been important in helping food import-dependent countries to access the food they need in the short run, but Canada can also do more to support food deficit developing countries to sustainably increase their own food production, which is vital for long-run food security in those countries. It's especially important to support small-scale producers, who are important providers of food in those contexts.
Support for food production in developing countries is important because global grain markets today are highly concentrated, which makes the trading system very vulnerable to shocks, as we saw in the case of Ukraine. Just five exporters—Russia, the EU, Canada, Australia and the U.S.—account for over 70% of the world wheat trade, and maize markets are similarly concentrated. If a shock affects one or more of these exporters, there are huge food security consequences for the poorest countries via higher prices. For these countries, encouraging them to rely on concentrated markets introduces risks, especially in an age of accelerating climate change and geopolitical conflicts that make shocks and disruptions to markets more likely.
As such, Canada can play an important role in supporting greater market diversity, including by helping the most vulnerable food deficit countries to sustainably increase their domestic food production, which would better enable them to weather disruptions to global grain markets caused by shocks.
Thank you very much. I look forward to the discussion.