Cost of living hits cooking oil hard as shortages push food prices, creating headaches beyond the food chain

• Consumers are to brace themselves for a cooking oil shortage that will continue to drive up the commodity price
• The latest consumer price index (CPI) data shows a 14 per cent rise in cooking oil prices in the past year, coming second to fruit and vegetables
• Analysts have gone as far to say that the cooking oil crunch is now likely to hit many other parts of the food chain because it is a fundamental staple ingredient
• As well as price hikes, the situation is also creating headaches for food labelling
• The situation has been made worse by workers shortages and the war in Ukraine, which is one of the biggest exporters of sunflower oil
• The situation remains volatile, and analysts say consumers may have to brace themselves for further price hikes in the year

2022 has threw many punches at consumers, with inflation running at the fastest pace in more than two decades and continuous rise in cost of living – but it is not done giving us surprises.

This time, in the form of a cooking oil crisis.

The latest consumer price index (CPI) data showed a 14 per cent rise in cooking oil prices in the past year, coming second to fruit and vegetables.

Analysts have gone as far to say that the cooking oil crunch is now likely to hit many other parts of the food chain because it is a fundamental staple ingredient.

One of Australia’s biggest food manufacturers, Goodman Fielder, said it is having to replace some of the sunflower oil in its well-known mayonnaise Praise with canola oil.

Rabobank senior commodities analyst Cheryl Kalisch Gordon said the cooking oil crisis centered around the war in Ukraine, with both it and Russia, two of the largest sunflower oil producers has seen their exports largely curtailed.

“[Edible oil] prices really escalated very quickly this year as a result of the invasion,” she said to ABC News.

However, sunflower oil is not one of the most-consumed edible oils globally, and the price pressures go far beyond the war in Ukraine.

“Prior to that, we were already seeing prices that were double the five-year average.

“On top of that, we had a disappointing harvest of soybeans out of Brazil and more broadly across South America, including Paraguay.”

Then there were issues during the pandemic with worker shortages in Indonesia and Malaysia, which produce much of the world’s palm oil.

“They just weren’t able to get the harvest out of the plantations,” she said.

As this all happened, some countries including Turkey and Argentina put export bans on their edible oils to ensure their own populations had enough of these vital ingredients.

As well as food staples, vegetable oil is also a core ingredient in many of life’s little luxuries, including makeup.

The situation remains volatile, and analysts say consumers may have to brace themselves for further price hikes.