The Russian invasion of Ukraine focused world attention on wheat prices and disruptions of supplies to poor countries that rely on imported grain. Now analysts at the IFPRI think tank say there is “another important emerging food security issue: the war’s impact on vegetable oils.”
Russia and Ukraine are major sources of sunflower oil. Vegetable oil prices were high before the invasion and have climbed by an average of nearly 30 percent since then. “Under the best of circumstances, however, prices are likely to remain high throughout this year and into 2023,” said the analysts in a blog.
The boom in biodiesel fuel, driven largely by government mandates and subsidies, is putting additional pressure on global vegetable oil prices, said the blog. “Suspending biofuel mandates or restricting mandates to nonedible oils or used cooking oils could bring welcome supplies of edible vegetable oils to the market,” wrote the authors, though they acknowledged “that is unlikely to happen given the strong political support these policies enjoy.” Export restrictions announced by Indonesia and Argentina also are a factor in high global prices.
The IFPRI blog, “The impact of the Ukraine crisis on the global vegetable oil market,” is available here.