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If the world is facing a food crisis, there was no sign of it at the Palais des Congrès in Montreal. Retailers, hôteliers, restauranteurs and other members of the global food industry gathered there for the North American Food Marketplace. The trade show, attracting 14,000 agri-business professionals and 550 companies from across Canada, the U.S. and 30 other countries, is regarded as one of the biggest venues for the international food services sector.
Dramatic price rises
"Food crisis," a new catchphrase in the media, has been turning up with greater frequency in headlines because of rising costs for commodities like fuel, grain and rice. Dramatic rises in food prices globally are being blamed on climate change, the soaring cost of fuel oil affecting fertilizer and transport, the use of grain to produce biofuel in developed countries, as well as dietary changes and the rising standard of living in Asian nations such as China. Since the start of 2006, the average world price for rice has risen by 217 per cent, wheat by 136 per cent, corn by 125 per cent and soybeans by 107 per cent.
In the last 12 months, world food prices have increased 57 per cent, according to the UN Food and Agriculture Organization (FAO). As a result, in recent weeks, food riots have erupted in Haiti, Burkina Faso, Ivory Coast, Senegal, Cameroon, Madagascar and the Philippines. "The world is embroiled with absorbing the implications of the simple truth that food will be considerably more expensive into the future," Maple Leaf Foods CEO Michael McCain said last week, reporting a first-quarter loss. The company, one of Canada's largest food processors, attributed the downturn to soaring costs for grain used in its bakeries and to feed livestock.
Crisis 'coming,' says industry rep
At the trade show, at least one specialty food sales professional was taking the matter in stride. When questioned about the crisis, Steve Zagakos, a purchasing and sales representative for food distributor Phoenicia, replied, "It will have an impact — it's coming." With offices in Montreal and in Oakville, Ontario, Phoenicia distributes about 5,000 products, ranging from nuts, olives and dried fruits, to pasta and biscuits, as well as staples like sugar and salt and rice. As prices for rice, flour and vegetable oil recently made headlines, Zagakos speculated on the causes.
"It's crazy," he said. "There is a shortage and the main reason is China. China absorbs a lot of things now." Beneath that, however, he sees the underlying cause as the skyrocketing cost of fuel oil. "The price of oil went up, everybody knows, not because of wars or other things, but because of China. China absorbs everything today." As an example of this, he cited a recent trip China's agriculture minister took to Greece to close a deal for an unspecified amount of olives and olive oil. "Imagine what will happen if they do?" said Zagakos. "Olive oil will become like medicine — very expensive."
Olive oil sales up
With North American eating habits becoming ever more cosmopolitan and healthy diet concerns rising at the same time, according to Zagakos sales of food products like olive oil (which at one time was relatively marginal among Canadian food shoppers) have shot up more than 200 per cent in recent years. "They say it's the next best thing to mother's milk," he said about the widespread perception of olive oil today, adding that Phoenicia sells a lot of low-acid extra-virgin olive oil. Since forest fires which devastated olive and other agricultural production in Greece last summer, olive products available from Greece have dropped about a quarter, said Zagakos.
"It was terrible," he said of the conflagration that resulted in the loss of at least 65 lives. "Of course, it was a big catastrophe. They call it the catastrophe of the century. They lost a lot of animals like sheep, goats, cows. A lot of olive trees were also lost. It's true. But there are also so many olive trees in Greece. That's why I talked to our suppliers in Greece and they told me it was about 20 to 25 per cent down. Next year we won't have any problem. Although the olive tree to rise up again it needs 20 years." Nonetheless, Zagakos anticipates the recovery of the Greek olive industry long before then.
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