The price of cooking oil, which is used in thousands of products from vegetable butter to instant noodles, is increasing rapidly which can “burn” consumers’ wallets.
From raw oil to cereals and cooking oil, many consumer goods are suffering an “earthquake” due to the current Ukraine crisis, along with a series of wide-deep sanctions by the US and Europe targeting Russia.
(Cooking oil price increased everywhere in the world)
Ukraine’s harbors are closed causing traffic and logistics to be cut off. Ukraine and Russia are not only the world’s largest suppliers of wheat, maize, and barley, but also export more than 75% of sunflower oil globally.
Sunflower oil is one of the four most used cooking oils in the world. That led to a tightening of the cooking oil market, as well as pushed the prices of palm oil and soybean oil to record levels.
Mr. Anilkumar Bagani, head of the research department at consultancy firm Sunvin Group based in Mumbai, said: “The flow of sunflower oil exports from the Black Sea is stuck and the Ukrainian refineries are closed.”
According to him, this situation will create a huge gap in the global supply of vegetable oil. That gap will not be easily filled because other suppliers of oilseeds and cooking oils are also facing their problems.
The drought caused a shortfall in the rapeseed crop in Canada last year and reduced the output of soybean in Brazil and Argentina. Malaysia is in a shortage of workers and Indonesia has restricted palm oil exports to protect its domestic supply.
Therefore, the prices of the four main oils (palm, soybean, rapeseed, and sunflower) have rocketed and impacted consumers as higher costs for all items from candy to shampoo in local stores.
The price of palm oil, which accounts for about 1/3 of global supply, has more than doubled since mid-June last year, while the price of soybean oil rose by about 50%. Sunflower oil from Ukraine also increased by about 50%. And so does rapeseed oil.
Currently, there is no sign that the Ukraine-Russia crisis will calm down so importers are racing for alternative supplies. China has issued orders prioritizing commodity security and directing state-owned companies to search for raw materials. This country is also “draining” stocks of cooking oil and soybean oil on the domestic market to lower the price.
As the leading importer of cooking oil, India and the Middle East countries are facing difficulties when the Ramadan festival is coming. India imports about 60% of its need for cooking oil consumption and the food prices in this country have risen at the fastest rate in 14 months.
In addition, the decline in supply can cause many oil-producing countries to restrict exports to protect their food security and control inflation.
Responding to Bloomberg news agency, Mrs. Khor Yu Leng, an economic expert at Segi Enam Advisors, said: “Consumers have to face rising prices. And there is the possibility of more problems about supply ”.
Analysts suggest that in the coming time, not only energy and oil prices, but food prices will also rise rapidly in the content of the continuing conflict in Ukraine, the world’s major wheat exporter.