Russia’s War Drives Up Cooking Oil Prices

For months, the Tarihi Balikca restaurant in Istanbul has been trying to absorb the rising price of sunflower oil that it uses to fry fish, squid and clams.

But in early April, when prices were almost four times what they were in 2019, the restaurant finally raised the price. Now even old customers look at the menu and walk away.

“We resist. We said ‘let’s wait a bit, maybe the market will improve, maybe (prices) will stabilize’. But we saw no improvement,” said Mahsun Aktas, a waiter and cook at the restaurant. “The customer can’t afford it.”

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Global cooking oil prices started to rise with the COVID-19 pandemic for a variety of reasons, from poor harvests in South America to virus-related labor shortages, as well as growing demand from the biofuels industry. The war in Ukraine – the country that produces almost half of the world’s sunflower oil, while Russia produces 25% – has interrupted its deliveries and triggered the price of cooking oil.

It is a new setback for the global food supply stemming from the Russian war, and another increase in spending for households and businesses in a context of rising inflation. The conflict has further pushed up energy and food costs, hitting the poorest the hardest.

Food supplies are especially threatened because the war has disrupted crucial grain shipments from Ukraine and Russia and worsened a fertilizer shortage that will make food more expensive and less plentiful. The loss of affordable sources of wheat, barley and other grains increases the chances of shortages and political instability in countries in the Middle East, Africa and Asia, where millions of people depend on cheap noodles and subsidized bread.

Vegetable oil prices hit a record in February and then rose 23% again in March, according to the Food and Agriculture Organization of the United Nations (FAO). Soybean oil, which sold for $765 per tonne in 2019, was on average $1,957 per tonne in March, according to the World Bank. Palm oil prices jumped 200% and were expected to continue rising after Indonesia, one of the world’s top producers, banned cooking oil exports from Thursday to protect domestic supply.

Some supermarkets in Turkey have imposed limits on the amount of vegetable oil consumers can buy, after fears of shortages sparked panic buying. Some businesses in Spain, Italy and the United Kingdom have also set limits. In a recent tweet, Kenya’s main power company warned that toxic fluids from electrical transformers were being stolen to be sold as cooking oil.

“Now we will have to cook everything, the days of the frying pan are over,” said Glaudina Nyoni as she looked at prices in a supermarket in Harare, Zimbabwe, where the price of vegetable oil has almost doubled since the start of the war. .

The high cost of cooking oil is one of the causes of the protests in Jakarta. Indonesia has placed caps on the price of palm oil in its country and will ban exports, further reducing supply. Palm oil was in demand as an alternative to sunflower oil and is used in many products, from cookies to cosmetics.

The Associated Press has documented human rights abuses in the sector, in which harmful effects on the environment had already been reported for years.

Prices could drop a bit in the fall as Northern Hemisphere farmers harvest corn, soybeans and other crops, said Joseph Glauber, a researcher at the International Food Policy Research Institute. But there is always the risk of bad weather. Last year, drought hit Canada’s rapeseed crop and Brazil’s soybean crop, while heavy rains affected palm oil production in Malaysia.

Meanwhile, consumers and businesses feel the blow.

At Jordan’s Grab n’Go, a small restaurant in Dyersburg, Tennessee known for its deep-fried cheeseburgers, owner Christine Coronado was also very distressed about the price hike. But with her spending up 20% across the board, and cooking oil nearly tripling since she opened in 2018, she finally raised prices in April.

“You hate to raise prices for people, but the expenses are much higher than they were a couple of years ago,” he said.

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