Experts indicate Canadians are unlikely to see immediate relief in food and oil prices due to ongoing uncertainty surrounding a potential reopening of the Strait of Hormuz.
Significant price increases have impacted Canadians, particularly gasoline costs, which saw a substantial rise last week. Deloitte has also revised its GDP growth forecast downward, citing the conflict's "uncertainty."
Andrew Botterill of Deloitte Canada anticipates four to eight weeks of continued price volatility. He explained that supply chains are not yet fully integrated following the conflict, and restoring them will be a gradual process.
The Strait of Hormuz is a critical artery for global energy and fertilizer supplies, yet it shows no signs of reopening amid the Middle East conflict. This disruption impacts one-third of global trade for essential nutrients.
Sylvain Charlebois from Dalhousie University notes that expectations for lower food inflation this year may be compromised. High energy costs and fertilizer shortages could lead to reduced farm yields and higher prices for fall harvests.
Food economist Mike von Massow states that while direct food shipments through the Strait are minimal, Canadians will feel the impact through increased freight costs. This will particularly affect fresh produce imports.
He anticipates fuel prices will decline more slowly than they rose, with considerable uncertainty remaining. Reports indicate Iran's accusation of U.S. ceasefire violations further complicate the situation.
While oil prices saw a sharp decrease following the ceasefire agreement, its translation to lower prices at Canadian gas pumps remains uncertain. Shipping companies continue to face backlogs, and the stability of the ceasefire is in question.
Despite Canada's significant crude oil production, its imports are largely from regions affected by the conflict, directly impacting domestic fuel prices.