Sunflower Oil Importers in Distress Due to the Russia Ukraine War, What’s the Way Ahead?
The ongoing Russia-Ukraine war has completely disrupted the import-export activities of sunflower oil, as Ukraine is the world's leading sunflower cultivator. It is expected that food producers will opt for alternative sources and products of sunflower oil to evade their losses.
Since past few months, the entire world has been awe-struck and traumatised by events arising on account of the enduring war between Russia and Ukraine. The Ukraine predicament has both overblown menace and convoluted the probable solutions of numerous economic aspects.
The human fatalities and massacre of all the things as a result of this disaster are certainly not acceptable; however, invocations stated that this war is likely to end shortly. Even though the Russian supremacy on the petroleum & gas supply to a majority of the European nations is well emphasised, hardly anyone knew that this war would also lay a heavy trap on sunflower oil, one of the key edible oils consumed globally.
Why is Russia-Ukraine war Driving up Sunflower Oil Prices?
Without a doubt, Russia as well as Ukraine are the foremost manufacturers of the global sunflower oil, accounting for 5.8 million & 7.3 million MT individually in the year 2020. Altogether, these 2 nations account for approximately 73 percent of the exportation of sunflower oil. With respect to the overall fat as well as oil usage, sunflower oil normally accounts for around 9 percent of the worldwide usage, and nearly the whole quantum is consumed as a food product.
The ongoing war has completely disrupted the import-export activities of sunflower oil as Ukraine is the world's leading sunflower cultivator. The dearth of oil supply is likely to give rise to at least 25 percent or 4-6 lakh tonnes deficiency of the supply of crude sunflower oil in India in the following fiscal. Additionally, the repercussions of the war are also intimidating the worldwide economy, quivering financial markets, and making life more terrifying for everyone across the globe. In the meantime, the prices of oils have raised as supply chain commotions surged; however, traders are scrambling to hunt for substitute oil sources in the already constricted market.
What Challenges is the Food Industry Facing During the Russia-Ukraine War?
Just as the food industry was steadily finding solutions to deal with the Covid-19-related shortages, Russia-Ukraine war has worsened the condition by increasing the prices of fundamental items such as oil and wheat. Food manufactures are finding it tough to deal with oil shortages, ever since the war has been triggered. Joe Biden, the President of the U.S., has cautioned that the world will witness food scarcities and nations ought to get ready for substitute sources. In addition, the Food and Agriculture Organisation (FAO), a dedicated agency of the UN that leads global efforts to defeat starvation and increase nutrition and food security, revealed that Ukrainian farmers are likely to miss the key May planting season for their crops. In a nutshell, this ferocious war has driven some exceptional challenges for the food sector and its related supply chains, which needs to be quickly resolved.
How to Deal with the Scarcity of Sunflower Oil?
It now seems like the war between the major sunflower oil producers will significantly restrain accessibility of sunflower oil for numerous applications. Along with the skyrocketing prices of various commodities, it is until now to be seen if manufacturers of snacks possibly will endure to manage to pay for such surged costs of raw materials in their frying fat options. Market statistics, however, specify that this might not be feasible and it is expected that food producers will opt for alternative sources and products to evade their losses.
The most probable answer for this possibly will be to get back to using palm olein as the frying fat option by several snack manufacturers. Market forces, mainly in the Middle East and Asian regions are by now beckoning this change. For the food producers, this can still be an easy change as there is a huge body of easily available information on how to successfully re-adopt palm olein individually or in combination with other palm fractions for frying applications by the snack food makers.
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