5 reasons cooking oils may get more expensive3 min read
(NEXSTAR) — As food prices rise across the world, the stuff used to cook some of our favorite foods is also poised to get a little pricier. The prices of vegetable oil, for example, hit an all-time high in February and then again in March, Associated Press reports.
Globally, food prices overall also hit their highest-ever point in March, according to CNN. The Food and Agriculture Organization of the United Nations measured a 33.6% increase on one basket of basic food items from last year.
So what’s causing these hikes?
Here are five major causes:
- War in Ukraine – Russia’s invasion of Ukraine, which began Feb. 24, has added to economic supply and pricing instability worldwide. Ukraine produces and exports a great deal of cooking oils, including about half of the sunflower oil in the world. Russia, currently embroiled in its invasion of Ukraine, also produces about 25% of global sunflower oil, AP explains.
- Indonesia banning exports – The Southeast Asian country, which accounts for nearly half of the palm oil in the world, says it’s trying to lower prices and maintain supply on the in-demand product by keeping more of it in the country. Indonesian Pres. Joko Widodo said prices skyrocketed (nearly 40%, per Reuters) due to both global inflation and lower imports from Ukraine. The export ban comes after protests in Jakarta over high cooking oil prices. Meanwhile, global agriculture data firm Gro Intelligence says the Indonesian ban is “likely to further fuel global food inflation.” Palm oil is used in about 50% of all packaged foods, according to the World Wildlife Foundation.
- Ongoing pandemic problems – The impact of COVID-19 on supply chains continues, fluctuating demands, lockdowns and labor shortages. In Malaysia, the world’s no. 2 palm oil producer, workers fled from the country en masse as borders closed to contain the spread of the coronavirus. Reuters reports many palm oil farms had about 75,000 fewer workers than they needed.
- Climate change – Soaring temperatures and droughts in 2021 resulted in crop losses for many international farmers. The Guardian explains that otherwise temperate Canada saw 122-degree heat during the growing season. Meanwhile, droughts in Ukraine and Russia last year also impacted supply.
- Biofuel production – As COVID-19 lockdowns become less prominent, return to offices and recreational travel are rebounding. Increased demand for fuel means more vegetable oils must be produced and used specifically for vehicles – all while many countries work to reduce reliance on petroleum-based fuels. In 2015, Forbes reports the United Nations even asked the U.S. to suspend some production because of its impact on food supply.
Effects on supply and pricing are already being seen for consumers in the West. Many supermarket chains in the UK have already imposed purchase limits on cooking oils, BBC explains. The country gets most of its sunflower oil from Ukraine, though other oils – like olive and rapeseed (canola) – are also under purchase limits in some stores. Stores in Italy and Spain have also followed suit, AP reports.
Globally, Statistica data shows the most commonly used vegetable oils are: Palm, soybean, rapeseed and sunflower seed. The least-used oils are cottonseed, coconut and olive. Cooking oil alternatives include avocado and peanut oils, yogurt and the Indian clarified butter ghee.
Joseph Glauber, a senior research fellow at the International Food Policy Research Institute, told AP that continued low supplies could force countries to find a balance between using oils for foods and using them for biofuels.
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