Ukraine’s sunflower oil crisis hits food, from crisps to cookies

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RUSSIA’s invasion of Ukraine has disrupted the supply of almost half of the world’s sunflower oil exports, forcing companies to turn to less desirable alternatives such as palm oil in products ranging from potato chips to cookies.

Thousands of items, including ready meals and even wrapping paper, use sunflower oil. Prices are rising and the ingredient will only become scarce from the summer as Ukrainian farmers may struggle to grow and export the crop.

“Sunflower oil prices have risen 1,000%, but it’s less about the price because the oils are often only a small part of the product,” said Richard Walker, the chain’s managing director. Iceland Foods grocery store. “The real challenge is getting your hands on it.”

As the food industry began to get Covid-related shortages under control, Russia’s invasion of Ukraine exacerbated the situation, with the war driving up the prices of staple ingredients such as wheat. US President Joe Biden has warned the world will experience food shortages and countries should prepare for alternative sources.

Walker said 450 products sold by Iceland Foods are affected and while many may use alternatives, such as canola oil, the grocer will “unfortunately” have no choice but to use canola oil. palm in about 30 to 40 products. It is a reversal of a high-profile pledge the grocer made in 2018 to remove all palm oil from its own brands over concerns about its links to forest destruction.

“I just don’t know how long it’s going to last,” said Icelandic Walker, adding that he would only use sustainably grown palm oil. “The only alternative to using palm oil under the current circumstances would be to simply empty our freezers and shelves of a wide range of staples.”

Wm Morrison Supermarkets said it will also need to use sustainable palm oil in some products when it is unable to switch to alternatives such as canola oil.

Russia’s invasion caused a humanitarian disaster in Ukraine and disrupted food trade across the world, sending wheat and corn prices to their highest in a decade. Ukraine is a major grain supplier to Middle Eastern countries. Meat prices are also under pressure as the cost of feed used for cattle and pigs rises.

Ukrainian farmers are continuing with spring planting, but will face challenges as they grapple with shortages of workers, fuel and fertilizer. Russia blocked Ukrainian ports, cutting off the traditional export route. Ukrainian President Volodymyr Zelenskiy said Thursday that Russian troops were targeting agriculture, placing landmines on farms and destroying machinery.

“Where sunflower oil exists as an ingredient in products, retailers will replace it with other safe oils, such as rapeseed oil,” said Andrea Martinez-Inchausti, deputy director of the food at the British Retail Consortium. For foods like potato chips that use sunflower oil as a key ingredient, retailers will add alternative oil information to existing labels, she said.

For prepackaged sandwiches, vendors must put up signs explaining that some ingredients may have changed because the packs were printed ahead of time, according to the British Sandwich & Food to Go Association. Philippines-based Monde Nissin said it was substituting British-sourced rapeseed oil for sunflower oil in its meat alternatives.

Companies using sunflower oil for frying have replaced it with palm oil, soybean oil and rapeseed oil, industry group Fediol said. Andrew Crook, chairman of Britain’s National Federation of Fish Fryers, said his own store in Euxton, northwest England, had seen prices for 20-litre drums of sunflower oil rise from 30 pounds to 40 pounds in the past two weeks. They usually eat eight or nine a week and may need to switch to palm oil at some point, although he likes sunflower for its “nice, clean taste”.

It raises fears that rising food prices and the need to seek more distant supplies will weaken European food standards and push companies to opt for ingredients that could be more harmful to the environment. Palm oil and soy have come under increasing scrutiny in recent years for their role in deforestation, leading to plans to import into the EU borders.

Rapeseed oil is seeing the biggest increase in demand, according to Hemeline Macret, head of oilseed market analysis at Strategie Grains. “It is already used for food and palm oil is not very popular due to its poor image.” Soybean oil isn’t used in many food recipes because it’s often made from genetically modified soybeans, she said.

The war is exacerbating an already strained supply chain, with transportation problems and crop setbacks pushing food prices to record highs. Soaring staple food prices in import-dependent countries in the Middle East and North Africa put people’s resilience at a “breaking pointaccording to the United Nations World Food Programme.

“If this war does not end soon, supply disruptions could last by 2023,” said Hemeline Macret. — Bloomberg


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