Ukraine sunflower crisis hits everything from chips to sweets

Sunflower oil prices have gone up 1,000%. File photo

Russia’s invasion of Ukraine has disrupted the supply of almost half of the world’s sunflower oil exports, forcing companies to turn to less desirable alternatives such as palm oil in products ranging from potato chips to biscuits.

Thousands of items, also including ready meals and even wrapping paper, use sunflower oil. Prices are surging and the ingredient will only become more scarce from the summer as Ukrainian farmers may struggle to grow and export the crop.

“Sunflower oil prices have gone up 1,000%, but it is less about the price as the oils are often only a small constituent part of the products,” said Richard Walker, the managing director of grocery chain Iceland Foods. 

“The real challenge is getting your hands on it,” he said. Mr Walker said 450 products Iceland Foods sell are affected and while many can use alternatives, such as rapeseed oil, the grocer will have no choice but to “regrettably” use palm oil in about 30 to 40 products. 

A field of rapeseed in blossom in County Kildare. Due to the upcoming shortage of sunflower oil, there will be increased demand for rapeseed oil

CLIMATE & SUSTAINABILITY HUB

This is a reversal of a high-profile pledge the grocer made in 2018 to remove all palm oil from its own-brand lines over concerns about its links to forest destruction. “I just don’t know how long this will go on for,” Mr Walker at Iceland said, adding that it would only use sustainably-grown palm oil. 

“The only alternative to using palm oil under the current circumstances would simply be to clear out our freezers and shelves of a wide range of staples,” he said. 

Morrison Supermarkets in the UK said they too will have to use sustainable palm oil in some products when they are unable to switch to “appropriate alternatives which is often rapeseed oil”. Russia’s invasion has caused a humanitarian disaster in Ukraine and disrupted trade in foods across the world, sending wheat and corn prices to the highest in a decade.

Ukraine is a key supplier of grains to countries in the Middle East. Meat prices are also under pressure as the cost of the feed used for cattle and pigs rises.

Ukrainian farmers are pressing ahead with spring planting but will face challenges as they grapple with shortages of workers, fuel and fertilisers. Russia has blocked Ukraine’s ports, cutting off the traditional export route. Ukrainian President Volodymyr Zelenskiy said earlier this week that Russian troops are targeting agriculture, placing land mines on farms and destroying machinery. 

"Where sunflower oil exists as an ingredient in products, retailers will be substituting it with other safe oils, such as rapeseed oil,” Andrea Martinez-Inchausti, deputy director of food at the British Retail Consortium, said. 

For food like potato chips which use sunflower oil as a key ingredient, retailers will add information about substitute oil onto existing labels, she said. For pre-packaged sandwiches, sellers are having to put up signs explaining some ingredients may have changed. 

Bloomberg