On Wednesday, sunflower oil prices significantly jumped after Russia’s invasion of Ukraine halted worldwide supply.
Accordingly, contracts tied to the Black Sea commodity surged 9.56% or 140.00 points to $1604.00 per metric ton.
The previous week settled around $1,950.50 per metric ton, the highest level since 2018. In line with this, the price of edible oil has risen by 64.00%.
The escalating crisis threatens the availability of food and edible oil across the globe. Remarkably, Ukraine is the world’s most significant sunflower producer.
The country supplied its oil across Asia, Europe, and the Middle East. At present, buyers brace for shortages, and shoppers currently hoard supplies.
Still, the Kremlin troops continue to bombard major ports, grain storage silos, and agricultural lands.
In line with this, sunflower seeds stored in the state will become inaccessible to export crushers.
The logistical constraints also impeded farmers’ access to fertilizers as they approached important planting seasons.
The planters anticipated sowing about 3.50 to 4.00 million hectares of the oilseed this spring. This projection is lower than the 6.80 million last year.
In addition, the deeper sanctions on Russia led to the closing of the Black Sea, a critical trading route.
Approximately 300,000 tons of Ukrainian sunflower oil are to ship in late February and March.
However, destination markets need to replace these quantities with edible oils available from other sources due to the ongoing crisis.
Consequently, the conflict has hit countries that heavily rely on grain and other food exports from Kyiv and Moscow.
For instance, sunflower oil from Ukraine represents 40.00% or 400,000 tons of the total Spain imports.
Correspondingly, Spanish supermarkets limited the purchase of the product to a few bottles per person.
Sunflower shortage pushes olive oil
As the supply of sunflower oil continues to be sluggish, retailers prompt customers to fill their shelves with the alternative.
For instance, Madrid produces more olive oil than it consumes. It also exports a third of its production of virgin and refined oils.
Consequently, the industry has forecasted to have 1.50 million tons of olive oil and another 250,000 tonnes of olive pomace oil.
This would likely cover the shortfall of Ukrainian imports while it looks for replacement markets.
Moreover, Spain aspires to sell more olive oil to neighboring countries, France and Germany. The local government even explained that the product could be a substitute for sunflower oil.
However, several food manufacturers disagreed that the two oils are interchangeable.