The Canadian government has announced that it will boost its overseas aid spending to $6bn CAD to help the most hard-hit countries in Africa and the Middle East, the country’s aid minister said on April 11.
Global food supplies have been severely disrupted in recent months in part due to the war on Ukraine, and sanctions placed on Russia. Global fertiliser prices remain significantly higher than in previous years in part due to sanctions placed on the regime of Russia, while this has had a knock on effect of seeing yields decrease due to a lack of fertiliser in the global system, particularly in sub-Saharan Africa.
“The Ukraine crisis is creating shock waves when it comes to supply chain and especially food security and impacting the most vulnerable at the most difficult time,” said Harjit Sajjan, Canadian Minister of International Development, Reuters reported.
AID INCREASE
“We are making adjustments to reflect this … People are going hungry because the prices of food have gone up,” the official added in his tour of north Africa.
The minister did not give the new aid figure, but the Ottawa-based Canadian International Development Platform said there was a 27% rise in foreign aid last year to around $6.6bn.
The UN previously said that the global food supply system has been seriously from damaged from the effects of coronavirus supply chain shocks, climate change damaging yields, and the ongoing fallout of the Ukraine war seeing a calory deficit appearing in several regions.
It is estimated that more than 50mn people across East Africa will face severe food shortages this year, which could potentially reach famine levels by the fourth quarter 2022 because the collapse of fertiliser supplies from Russia and significant increase wholesale grain prices on international markets.
Sajjan added the Trudeau administration is boosting aid to the World Food Programme, whose annual requirements have reached an all-time high of $22.bn in part due to the war in Ukraine and production and supply chain issues.
“We have increased our support for the Middle East region when it comes to food,” he said citing as one example Lebanon, which has a significant reliance on Ukraine wheat and is facing bread shortages.
FERN TAKE
Our take: The ongoing effects of the Russian war on Ukraine are clear. Whether by design or accident, Russia and Ukraine are the first and fourth largest grain exporters on the planet have effectively been pulled from the market. Ukraine has mined its ports to stop Russia stealing grain, while Russia has offered grains to preferred buyers, including Iran, Syria, as well as north African states. Globally supplies remain constrained and prices stubbornly high. To further add to global food supply shocks, Russian nitrogen fertilizer (Russia is number one here too) has been knocked out of western supply chains due to sanctions placed by OFAC on that country.
This decision by the US and the EU to cut out Russia is now having an effect on their economies, including European supplies of food struggling with the supply chain shocks. It remains to be seen if the US, EU, UK and other countries are able to come to terms with the Russian regime to release supplies to markets before the fourth quarter before it is too late. In some regards, much of the growing capacity of countries in Africa has already been damaged for 2021 and supplies are being sought out elsewhere if possible.
