Why is there a shortage of cooking oil in the UK? Business News

Global supply shortages and soaring costs have prompted UK supermarkets to introduce restrictions on the purchase of cooking oils.

Prices have been rising since the start of the pandemic for multiple reasons, including poor harvests in South America and Covid-related staffing shortages.

The demand from the biofuel industry has steadily increased.

But in recent weeks, pressures on the supply of olive, sunflower and other cooking oils have increased further.

The war in Ukraine – which supplies nearly half of the world’s sunflower oil – has halted shipments and sent cooking oil prices skyrocketing.

With Russia supplying 25% of the world’s sunflower oil, supply lines have been disrupted, contributing to shortages in the UK and elsewhere.

UK supermarkets as well as stores in Spain, Germany, Italy and Turkey are seeing limits introduced to prevent panic buying, and in some cases even empty shelves.

In the UK, Tesco has limited shoppers to three items of cooking oil per customer, while Morrisons and Waitrose allow the purchase of two items and Iceland one.

Fraser McKevitt, head of retail and consumer insights at Kantar, said: “Over the weekend, several supermarkets introduced restrictions on cooking oil purchases as worried consumers filled their cupboards. .

“The combination of higher prices and increased demand caused the cooking oil market to grow 17% from April.

“Sunflower oil, Britain’s most popular choice for frying, and vegetable oil grew even faster – by 27% and 40% respectively.”

According to the Food and Agriculture Organization of the United Nations, vegetable oil prices hit a record high in February and rose another 23% in March.

Soybean oil, which sold for $765 (£609) per metric ton in 2019, averaged $1,957 per metric ton in March, the World Bank said.

Palm oil prices have risen 200% and are expected to rise further with Indonesia, one of the world’s top producers, set to ban cooking oil exports on Thursday to protect domestic supplies .

Consumer goods giant Unilever said it has contracts for ingredients used in its food, hygiene and personal care brands – such as palm oil – for the first half of the year.

But he warned investors that his costs could rise significantly in the second half of 2022.

Cargill, a global food giant that makes vegetable oils, said its customers are switching formulas and experimenting with different types of oils at a higher rate than usual.

The cooking oil crisis is just the latest in a series of problems besetting the global food distribution network in the wake of the war in Russia.

The conflict has further aggravated already high food and energy costs, hitting the poorest people the hardest.

Distributors of grains like wheat are also under pressure. Last year Ukraine was the world’s sixth largest wheat exporter, accounting for 10% of the market, and the dispute has seen prices rise and supplies disrupted.

Additional reports by agencies