War in Russia fuels vegetable oil prices

ISTANBUL (AP). For months, Istanbul restaurant Tarihi Balikca has struggled to cover rising costs for the sunflower oil its chefs use to fry fish, squid and mussels.

But in early April, with oil prices almost four times higher than in 2019, the restaurant finally raised prices. Now even some longtime customers look at the menu and leave.

“We resisted. We said, “Let’s wait a bit, maybe the market will improve, maybe (prices) will stabilize.” But we saw that there were no improvements,” said Mahsun Aktas, a waiter and chef at the restaurant. “The client can’t afford it.”

World prices for vegetable oil are rising from COVID-19 pandemic started for several reasons, from crop failure in South America, to labor shortages due to the virus, to steadily growing demand from the biofuel industry. War in Ukraine — which supplies almost half of the world’s sunflower oil, in addition to 25% from Russia — interrupted supplies and caused a sharp increase in vegetable oil prices.

this is the last the effects of Russia’s war on world food supplies, and another rising cost shrinking households and businesses as inflation rises. The conflict has escalated high food and energy costshitting the poorest sections of the population the hardest.

The food supply is under particular threat as the war disrupted the most important grain supplies from Ukraine and Russia and exacerbated the global fertilizer shortage this would mean more expensive and less plentiful food. loss of available wheat stocksbarley and other cereals increase the prospect of food shortages and political instability in the Middle East, Africa and parts of Asia, where millions of people rely on subsidized bread and cheap noodles.

According to the Food and Agriculture Organization of the United Nations, vegetable oil prices hit a record high in February before rising another 23% in March. Soybean oil, which traded at $765 per metric ton in 2019, averaged $1,957 per metric ton in March, according to the World Bank. Palm oil prices have risen by 200% and will rise even more after Indonesia, one of the world’s largest producers, bans vegetable oil exports from Thursday to protect domestic supplies.

Some supermarkets in Turkey have imposed limits on the amount of cooking oil households can purchase after fears of shortages sparked panic buying. Some stores in Spain, Italy and the UK have also set limits. German shoppers are posting pictures of empty shelves on social media where sunflower and rapeseed oil usually sit. In a recent tweet, Kenya’s main energy company warned that thieves were draining toxic fluid from electrical transformers and reselling it as vegetable oil.

“Now we just have to boil everything, the days of frying pans are over,” said Glaudina Nioni, surveying prices at a supermarket in Harare, Zimbabwe, where the cost of vegetable oil has nearly doubled since the start of the war. A 2-liter bottle now costs up to $9.

Emivati, a food stall owner in Jakarta, Indonesia, says she needs 24 liters of vegetable oil every day. She cooks nasi kapaw, a traditional mixed rice that she serves with dishes such as spiced deep-fried beef jerky. Since January, she has had trouble securing supplies, and what she buys is much more expensive. Profits are falling, but she is afraid of losing customers if she raises prices.

“I’m sad,” said Emivati, who only uses one name. “We agree to raise the price of vegetable oil, but we can’t raise the price of the products we sell.”

Height the cost of cooking oil is partly behind recent protests in Jakarta. Indonesia has imposed price restrictions on palm oil domestically and will ban exports, which will create new pressure around the world. Palm oil has been sought as an alternative to sunflower oil and is used in many products, from cookies to cosmetics.

The Associated Press has documented human rights violations. in an industry whose environmental impact has been condemned for years.

While in London, Yawar Khan, owner of the Akash Tandoori restaurant, said a 20-litre barrel of cooking oil cost him £22 ($28) a few months ago; now it’s 38 pounds ($49).

“We can’t pass on the entire price (increase) to the consumer, that too will cause a disaster,” said Khan, who is also struggling with rising prices for meat, spices, energy and labor.

Big companies feel the pain too. London-based Unilever, maker of Dove soap and Hellmann mayonnaise, said it has contracts to supply critical ingredients such as palm oil for the first half of the year. But he warned investors that his spending could rise significantly in the second half of the year.

Cargill, the global vegetable oil food giant, said its customers are changing recipes and experimenting with different types of oils at a faster rate than usual. This can be tricky because oils have different properties; olive oil burns at a lower temperature than, for example, sunflower oil, while palm oil is more viscous.

Prices could come down this fall as northern hemisphere farmers harvest corn, soybeans and other crops, said Joseph Glauber, senior fellow at the International Food Policy Research Institute. But there is always the danger of bad weather. Last year, drought The rapeseed crop in Canada and the soybean crop in Brazil, while heavy rains have affected palm oil production in Malaysia.

According to Steve Mathews, co-head of research at Gro Intelligence, an agricultural data and analytics company, farmers may be hesitant to grow enough crops to make up for crop shortages from Ukraine or Russia because they don’t know when the war might end.

“If there was a ceasefire or something like that, we would definitely see prices drop in the short term,” he said.

In the longer term, the crisis could lead countries to revise biofuel mandates, which determine the amount of vegetable oils that must be blended with the fuel in order to reduce emissions and energy imports. In the US, for example, 42% of soybean oil goes into biofuel production, Glauber said. Indonesia recently shelved a plan to demand 40% palm oil-based biodiesel, while the European Commission said it would support member states that decide to cut their biofuel mandates.

Meanwhile, consumers and businesses are struggling.

Harry Niazi, owner of The Famous Olley’s Fish Experience in London, says he used to pay around £22 ($29) for a 20-litre can of sunflower oil; the cost has recently jumped to £42.50 ($55). Niyazi sorts out up to eight jugs a week.

But even more than rising prices, he is worried about the complete depletion of sunflower oil. He is thinking of selling his truck and using the proceeds to buy oil.

“It’s very, very scary, and I don’t know how the fish and chip industry is going to handle it. I really don’t know, he said.

So far, Niyazi has refrained from raising prices because he doesn’t want to lose customers.

At Jordan’s Grab n’ Go, a small restaurant in Dyersburg, Tennessee known for its grilled cheeseburgers, owner Christine Coronado was also tormented by price hikes. But with costs rising 20% ​​across the board — and vegetable oil prices nearly tripling since opening in 2018 — it finally raised prices in April.

“You hate to raise prices on people, but it’s just that the prices are much higher than they were a couple of years ago,” she said.

Chan reported from London. AP journalists Edna Tarigan and Fadlan Siam in Jakarta, Indonesia; Farai Mutsaka in Harare, Zimbabwe; Susan Fraser in Ankara, Turkey; Mehmet Guzel in Istanbul; Ann D’Innocentio in New York; and Sebabatso Mosamo and Mogomotsi Magome in Johannesburg contributed.

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