A looming chickpea shortage is on the way

Chickpea prices climbing

Since the start of the pandemic, we have heard about shortages countless times. Most sections of the grocery store have been hit by tightening supplies for one reason or another. But the latest headlines we are seeing are about chickpeas.

Many analysts are expecting chickpea inventories to drop significantly in months to come. For westerners, chickpeas are primarily associated with hummus, an increasingly popular source of fibre for curious consumers wanting to experiment with new ingredients and dishes. But a looming chickpea shortage is likely on the way.

According to Reuters, chickpea crop yields are expected to drop as much as 20 per cent this year due to inclement weather in many parts of the world. India is the largest producer of chickpeas globally, followed by Turkey and, of course, Russia. Canada is number nine in the world, and most of our production is for export markets. Canada’s seeded areas for chickpeas dropped this year, going from 185,500 acres last year to 177,800 this year.

Prices for other commodities were more interesting for farmers. The same happened in the U.S. Russia and Ukraine are usually top exporters of chickpeas, but not this year. While Ukraine is short at least 50,000 tons of chickpeas this year, which would normally end up in the European market, Russia is impacted by trade sanctions resulting from its invasion of Ukraine.

Chickpeas are a cheap and efficient source of plant protein. Not everyone eats them, but consumers do love them. In North America, chickpea prices have already increased 12 per cent from last year, according to NielsenIQ.

Chickpeas are generally used in hummus. Chickpeas might also be popped and eaten like popcorn or ground into flour and used in many vegetable protein-based products we find at the grocery store. Chickpeas are also commonly used in soups, stews, and chilis.

Chickpeas are nutritional powerhouses for consumers who don’t necessarily opt for animal proteins regularly or can’t afford them. Chickpeas are naturally low in sodium and sugar and are cholesterol free. And for people living with celiac disease and who need gluten-free products, chickpeas are a godsend.

Last week though, the world received some good news. Well, sort of. Ukraine and Russia finally signed a deal in Turkey committing to let tons of vital grain supplies ship out from long-blockaded southern ports in Ukraine. Some of the grains stuck at ports are wheat, barley, and, of course, chickpeas.

But the port of Odesa was bombed just 24 hours after the deal was announced.

Russia’s track record in easing commodity pressures is not reassuring. There is still hope, but it’s a bit of a wait-and-see scenario. If executed, a food security crisis won’t be averted in parts of the world, including North-East Africa and the Middle East, but it will lessen the blow in many regions.

For the West, commodity prices have been dropping steadily since May. Wheat prices have fallen from a record $13.38 on May 17 to under $8 a bushel. Corn, canola, sunflower oil, rice, and soybeans are all much cheaper than just a few weeks ago. The Ukraine-Russia grain deal is helping, but prices would still be lower regardless. Procuring ingredients for food manufacturers is getting less expensive by the day, which helps our food inflation situation.

In other words, looming deficits are baked into commodity prices already, and buyers have bought what they need for the fall, albeit at a premium. But they at least have some ingredients for their customers. The commodity supercycle appears to be over, thank goodness. Market conditions are much more predictable, which helps companies plan and anticipate demand. This will likely benefit us all as consumers.

As our agricultural production in North America and Europe concludes in the coming weeks, we should expect to see more reports of grain shortages. So, we need to brace ourselves. Previous reports have already targeted mustard and sunflower seeds. Chickpeas are just the latest one.

North America won’t be short of anything as it can buy itself out of a food security pickle. But other poorer regions won’t have as much luck. We are starting to see signs of civil unrest in many regions of the world. While our food inflation situation is calming down here at home, the worst is yet to come for many other parts of the globe.

Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.


Three-quarters of British Columbians support mandatory calorie counts on menus

Counting calories on menus

The COVID-19 pandemic had a profound effect on the way British Columbians eat. In 2020, we saw a significant increase in food delivery after restaurants were compelled to adapt to changing dynamics. Even groceries made their way to our homes, severely limiting our ability to personally pick and choose what to purchase.

Now, as restaurants are once again open and the province’s residents are ready to experience dining out, Research Co. and Glacier Media reviewed our relationship with nutrition. The findings show a public that may be growing more conscious about what to purchase at the supermarket, but an inability to maintain the same procedures when someone else prepares the food we eat.

Across the province, more than a third of British Columbians (37 per cent) say they “frequently” check labels to review the nutritional content of products when they buy groceries for themselves or others in their household. Women are more likely to be in this group (40 per cent) than men (33 per cent).

Our ability to analyze harmonized labels is a huge factor in this level of awareness from British Columbians. We can spend ample time looking into the nutritional content of breakfast cereals or ice cream tubs, and emerge ready to make a decision right then and there.

Restaurants currently lack the same standards that we enjoy at grocery stores. From 2012 to 2020, the province had a voluntary Informed Dining database for commercial foodservice businesses. Right now, few venues feature nutritional data on menus or websites. It is no surprise that only 14 per cent of British Columbians say they “frequently” check menus when dining out to review the nutritional content of specific dishes.

There is an even steeper decline when British Columbians are asked about their behaviour when ordering food delivery. Just 11 per cent check menus or apps to review nutritional content, with the proportion dropping to just six per cent among those aged 55 and over.

Our tendency to turn away from learning more about the food we consume if we are not the ones who prepare is also present on other items. While 29 per cent of British Columbians “frequently” check the total calories of the products they buy at the grocery store, the proportions drop dramatically for menus at restaurants (14 per cent) and food delivery (11 per cent).

A similar decline is observed on two other components: sodium (from 32 per cent at the grocery store, to 14 per cent at restaurants and to 10 per cent in food delivery) and fat (from 29 per cent at the grocery store, to 13 per cent at restaurants and to 11 per cent in food delivery).

Many factors help explain these fluctuations. For some British Columbians, dining out or ordering in is a chance to escape. They may not want to be deterred or demoralized by finding out the caloric content of the cheeseburger they crave after a long day of work. However, the lack of standards for restaurants and apps is also an issue.

A quick look at some of the apps reveals a significant difference. For companies that also have operations in Ontario, the nutritional information is easy to access. Businesses based in British Columbia are not meeting these requirements, even less so now that Informed Dining has been summarily abandoned.

In Ontario, it is mandatory to display calories on any menu that lists or depicts standard food items offered for sale by a regulated foodservices premise. Three in four British Columbians (76 per cent) support implementing a similar regulation in their province, while only 13 per cent are opposed to it.

The food outlets that are already providing this information in British Columbia are the ones that have operations in Ontario. It is easier for companies like Starbucks and McDonald’s to rely on the same billboards and software that they already use in the most populous province. Other companies have been slow to react.

The availability of this information matters more now than four years ago. The proportion of British Columbians who rely on an activity tracker to monitors fitness-related metrics – such as distance walked, exercise and/or calorie consumption – increased from 41 per cent in 2018 to 45 per cent in 2022.

There is growth across all three age groups, with a majority of British Columbians aged 18 to 34 (53 per cent, up six points) now relying on activity trackers. The numbers are also up among their counterparts aged 35 to 54 (47 per cent, up six points) and aged 55 and over (36 per cent, up six points). It is clear that more residents of the province are paying attention to these metrics. It is time for the provincial government to seriously consider what is now mandatory in Ontario.

Mario Canseco is president of Research Co.

Results are based on an online study conducted from July 4 to July 6, 2022, among 800 adults in British Columbia. The data has been statistically weighted according to Canadian census figures for age, gender and region in Canada. The margin of error—which measures sample variability—is plus or minus 3.5 percentage points, 19 times out of 20.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Light at the end of the food inflation tunnel?

Rising cost of food

Once again, the numbers coming out of Statistics Canada were discouraging. The food inflation rate in the country was 8.8% in June, which is still higher than the general inflation rate.

Everyone is affected by higher food prices. Americans learned last week that food inflation at the grocery store was 12.4%, a 41-year high.

Despite all this, consumers can see some light at the end of the long tunnel we’ve all been passing through in recent years.

First, I believe food inflation in Canada may have already peaked. Supply chain challenges are still there, making the movement of goods more expensive, but things are slowly improving. Pandemic protocols around the globe are increasingly becoming predictable, making logistical planning much easier. In February, the Russian invasion of Ukraine pushed commodity prices higher, making input costs an issue for most farmers and food manufacturers. But this seems to have stabilized as well.

Markets are much calmer than before and, most importantly, more predictable. If nature continues to cooperate, Canada’s agricultural sector should see a strong harvest this year, helping to keep commodity prices lower and costs down. Again, more good news.

Since March, food sales at dollar stores have increased by 18 per cent, according to NielsenIQ. Sales at discount stores have also increased by 5% since that period, so consumers are clearly trading down, and grocers know it. More discount store conversions are on the way in Canada. We have seen at least 15 new major discount stores in the country so far this year alone. Depending on the week, consumers can save between 25% to 40% at a discount store, compared to a regular grocery outlet.

But the Canadian Dairy Commission played party pooper by recommending an unprecedented second increase of 2.5% for Sept. 1, as schools open in the fall. This latest increase comes after a record 8.4% hike in February. As a result, the price of butter is up almost 20% since December. In some markets, fluid milk is 25% more expensive than last winter. The 2.5% at the farm will look more like six per cent to 10 per cent at retail, for all consumers. As prices stabilize in most sections of the grocery store, dairy will continue to be the exception for a while.

To add insult to injury, we also learned last week that executives at the Canadian Dairy Commission – federal employees – received bonuses last year. The Crown corporation refused to disclose the amounts or reasons that bonuses were given. There’s nothing wrong with bonuses, but the lack of transparency is simply unacceptable. Taxpayers and consumers deserve better. Our quota system was designed to make our dairy sector immune to inflationary cycles. Something is not working.

Interest rates are also going up. Last week, the Bank of Canada made an almost unprecedented move, delivering a jolt to consumers everywhere by raising its benchmark interest rate a full percentage point. This is the biggest one-time increase since August 1998.

Since the announcement, mortgage brokers have been busy. For many households, the cost of shelter spiked, making it harder to spend on anything else.

But food is a necessity. Before the interest rate hikes, the market was flooded with cash, and some consumers had no qualms about paying $28 for a T-bone steak which obviously contributed to higher prices in our economy, including at the grocery store, especially for premium products and categories. As fewer people can now afford a $28 T-bone steak, we are expecting some prices to soften or even drop a little. Simple food economics.

With higher rates, though, our Canadian dollar will strengthen against the American greenback, making imports cheaper. And we do import many food products. This will likely help consumers who purchase centre-of-the-store dry goods, whose prices have skyrocketed recently. But the American Federal Reserve is also planning another rate increase, which could put pressure on our dollar. Interesting times. Higher rates are bad news for mortgage owners but good news for imports.

Overall, we should not expect prices to drop anytime soon, year to year, but the rate at which food prices are rising is slowing down. Food inflation is critical for our food economy, but a 10% is not sustainable. As predicted in December of last year by Canada’s Food Price Report 2022, we should end the year at about seven per cent, as forecasted, unless some other geopolitical crisis occurs.

This is still high, but it’s not 10%.

Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.


Inflation cranks up heat

Summer heat isn’t the only thing making Canadians sweat this summer; abnormally high inflation and rising interest rates are putting the heat on many Canadians.

We’ve gone from zero inflation in August 2020 to 8.1% in June 2022. That’s really fast. The last time we saw anything like it was 1970-73 when inflation rose from one per cent to eight per cent over three years.

It was a full 360-degree head turner, like The Exorcist, which also came out in 1973. Following that rise, inflation stayed between six per cent and 13 per cent for a decade, when it finally broke with the crushing double recessions of 1980 and 1981.

So what do you do when inflation soars to nauseating heights? If you’re the Bank of Canada, you try to suppress inflation by raising interest rates.

The problem is the bank is using a very blunt tool. If you’re hoping for a soft landing, I have bad news for you: it’s never worked.

Not once in 60 years has the Bank of Canada managed to lower inflation through interest rate hikes without causing a recession.

If a pilot told me, “I’ve only attempted this landing three times in 60 years, and I failed every time,” maybe they’ll land it this time, but it’s definitely not a plane I’d want to be on.

But here we are, in a fairly rare moment in history where rising inflation and rising interest rates are on a collision course.

What can you do? Rifle through the coupon drawer for sales, maybe. Ask your boss for an 8.1% raise this year. Good luck with that.

When you think about inflation, what comes to mind is higher food and gas prices. The trouble with gas prices is that most of what drives them isn’t determined here. They are based on the price of oil and gasoline refining capacity.

Oil prices are up due to the Russian war in Ukraine, and refining capacity in the U.S. is down because several refineries didn’t re-open after the pandemic.

The trouble with interest rate hikes is that they won’t decrease food and gas prices. They’re more likely to cause a recession.

Controlling inflation with interest rates can work, but at a terrible cost. There are plenty of other things to try if governments are interested.

Governments don’t control the price of food and gas, but they do have control over other consumer prices. They need to exercise that control.

For example, the federal government can control who gets a mortgage to buy real estate. Let’s make it so that real estate investors can’t get mortgages anymore. A house should be a home, not a proxy for the stock market.

The provinces control how quickly rents are allowed to increase; let’s lock that down.

Tuition, transit fares, and child care fees are part of inflation and are controlled by governments; let’s bring those down. For instance, cutting child care fees by 50% this year will make inflation negative for families with young children.

Governments can also help lower-income households better cover increasing prices. Remember the pandemic? The federal government made several one-time transfers to lower-income families. Those tools are already in place; let’s use them again.

Incredibly, most provinces don’t adjust their low-income transfers for seniors and children to inflation. Almost no province adjusts social assistance upwards to match inflation. It’s an easy fix.

This isn’t the 1970s; pandemic-related initiatives taught us a lot about the power of governments to act in a crisis. Now isn’t the time to hit the snooze button.

David Macdonald is senior economist with the Canadian Centre for Policy Alternatives, a non-partisan research institute.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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