By Gerardo Fortuna and Natasha Foote
(EurActiv) — Some European retailers have started taking the drastic step of limiting the amount of sunflower oil per consumer amid ongoing fears that the war in Ukraine will cause food shortages and trigger panic buying.
Less than three weeks after the invasion started, alarm bells are already ringing about the knock-on impact of the war on the EU, as well as international, food supply chains, including looming sunflower shortages.
Together, Ukraine and Russia make up the majority of worldwide exports of sunflower oil, with Ukraine alone responsible for between 35 and 45% of sunflower oil refined in the EU.
According to the European vegetable oil association, Fediol, available stocks of crude sunflower seed oil in the EU are estimated to last between four to six weeks, with a shortfall of refined/bottled sunflower seed oil in the European market expected after.
Sunflower seeds oil is an essential ingredient of large-scale food production, widely used for the preparation of preserves, sauces, mayonnaise, spreadable dressing, and bakery products such as biscuits.
It is also one of the preferred options for frying in the hotel, restaurant and catering sector (Horeca) and a key component for the oleochemical and energy industry, for instance in the manufacturing of biodiesel.
Alternatives to sunflower seeds oil such as rapeseed, coconut, palm, and soy oils are available but the entire vegetable oil sector is experiencing a spike in prices, with the UN’s Food and Agriculture Organisation (FAO) vegetable oil price index reaching a record 8.5% increase in the past days.
Packaging is another issue in replacing sunflower oil, as the industry usually prepares and prints food labelling for their products once a year, but any later change needs to be promptly indicated.
“Some are thinking of asking the competent authorities for a time exemption to use alternative types of oil without having to change the labels,” Natasha Linhart from Atlante, a Bologna-based group supplying supermarket chains such as Walmart and Sainsbury’s, told Italy’s daily Sole24ore.
Risk of panic buying
The current situation has now reached the consumer level, prompting several well-known Spanish supermarkets to ration the amount of sunflower oil available for purchase per consumer to 5 litres, EURACTIV has been informed.
This was confirmed to be true by the European Commission during its closed-doors food security crisis expert meeting held on Wednesday (9 March), according to sources familiar with the discussions.
Those sources told EURACTIV that the EU executive warned against such actions because it feared this could “send a signal” to consumers that food is in short supply, triggering panic buying. For example, it drew parallels to toilet paper, which was frantically panic-bought in the early days of the COVID pandemic.
Likewise, with stocks running low in Italy, some national retailers such as Coop, Eurospin, Famila, and Mega have reportedly started rationing seeds oil in Liguria, Tuscany, and Veneto regions.
For instance, supermarkets in Treviso and Belluno, two cities in the Veneto region, are limiting the purchase of seed oil to a maximum of two bottles per customer as they were experiencing some cases of hoarding behaviour, according to local press reports.
In some supermarkets in Tuscany, only five 1-litre bottles of sunflower seeds oil and two 1-litre bottles of corn seed oil can be purchased by customers. These remain, however “limited episodes,” according to the retailing cooperative Coop.
“The situation regarding the supply of products is evolving, but not to the extent that there are imminent concerns,” the cooperative said in a note.
Global v. local
As reported by EURACTIV’s partner EFE Agro, the Spanish edible oil industry sees no reason for immediate concern.
“In the short term, there should be no problem [of shortages],” the general director of the national association of edible oil refiners and bottlers (Anierac), Primitivo Fernández, told EFE Agro after evaluating the situation.
However, the disruption has already ruined the industry plans for the short/mid-term, according to his Italian counterpart, Carlo Tampieri, president of the national seed oil association (Assitol).
“If the war were to cease in the next few days, returning to normal would still be complex,” he said.
Fernández conceded that if the conflict continues, it will be necessary to look for other origins for this product, given that Ukraine and Russia are “the two most important sunflower oil-producing countries in the world”.
In terms of solutions, Fernández indicated that in the southern hemisphere, they have already identified some potential sunflower oil-producing countries, such as Argentina and South Africa.
These countries are also being explored as a potential alternative market for the rest of Europe.
He added that other oils in Spain, such as olive, rapeseed or corn, should be considered as substitutes, while the cultivation of sunflowers and other oilseeds should be encouraged in Spain and elsewhere in Europe, including areas left fallow for biodiversity or other purposes.
This call has been echoed by the French presidency of the EU Council and other EU-27 agricultural ministers, who would like to set aside the 10% agricultural land earmarked for high biodiversity landscapes for producing protein crops.
This option is currently under consideration by the EU executive as part of a toolbox of solutions to help ease the situation in the European agri-food sector, and will now be considered in the upcoming Special Committee on Agriculture (SCA) meeting next Monday (14 March).