World feels Russian invasion impact on cooking oil prices
ISTANBUL — For months, Istanbul restaurant Tarihi Balikca tried to absorb the surging cost of the sunflower oil its cooks use to fry fish, squid and mussels.
But in early April, with oil prices nearly four times higher than they were in 2019, the restaurant finally raised its prices. Now, even some longtime customers look at the menu and walk away.
“We resisted. We said, ‘Let’s wait a bit, maybe the market will improve, maybe (prices) will stabilize.’ But we saw that there is no improvement,” said Mahsun Aktas, a waiter and cook at the restaurant. “The customer cannot afford it.”
Global cooking oil prices have been rising since the COVID-19 pandemic began for multiple reasons, from poor harvests in South America to virus-related labor shortages and steadily increasing demand from the biofuel industry. The war in Ukraine — which supplies nearly half of the world’s sunflower oil, on top of the 25% from Russia — has interrupted shipments and sent cooking oil prices spiraling.
It is the latest blow to the global food supply from Russia’s war, and another rising cost pinching households and businesses as inflation soars. The conflict has further fueled already high food and energy costs, hitting the poorest people hardest.
Vegetable oil prices hit a record high in February, then increased another 23% in March, according to the U.N. Food and Agriculture Organization. Soybean oil, which sold for $765 per metric ton in 2019, was averaging $1,957 per metric ton in March, the World Bank said. Palm oil prices were up 200% and are set to go even higher as Indonesia, one of the world’s top producers, bans cooking oil exports this week to protect domestic supply.
Some supermarkets in Turkey have imposed limits on the amount of vegetable oil that households can buy after concerns about shortages sparked panic buying. Some stores in Spain, Italy and the United Kingdom also have set limits. In a recent tweet, Kenya’s main power company warned that thieves are draining toxic fluid from electrical transformers and reselling it as cooking oil.
“We will just have to boil everything now, the days of the frying pan are gone,” said Glaudina Nyoni, scanning prices in a supermarket in Harare, Zimbabwe, where oil costs have almost doubled since the outbreak of the war. A 2-liter bottle now costs up to $9.
Across the world at Jordan’s Grab n’ Go, a small restaurant in Dyersburg, Tennessee, known for its fried cheeseburgers, owner Christine Coronado also agonized about price increases. But with costs up 20% across the board — and cooking oil prices nearly tripling since she opened in 2018 — she finally hiked prices in April.
“You hate to raise prices on people, but it’s just that costs are so much higher than they were a couple of years ago,” she said.
Big companies are feeling the pain, too. Londonbased Unilever — maker of Dove soap and Hellmann’s mayonnaise — said it has contracts for critical ingredients like palm oil for the first half of the year. But it warned investors that its costs could rise significantly in the second half.
Prices could moderate by this fall, when farmers in the Northern Hemisphere harvest corn, soybeans and other crops, said Joseph Glauber, a senior research fellow at the International Food Policy Research Institute. But there’s always the danger of bad weather. Last year, drought pummeled Canada’s canola crop and Brazil’s soybean crop, while heavy rains affected palm oil production in Malaysia.
And farmers may be hesitant to plant enough crops to make up for shortfalls from Ukraine or Russia because they don’t know when the war might end, said Steve Mathews, co-head of research at Gro Intelligence, an agriculture data and analytics company.