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Supermarkets keep sunflower oil prices high despite Ukraine supply deal

The Telegraph logo The Telegraph 24/11/2022 Daniel Woolfson
Sunflower oil - Andrey Rudakov/Bloomberg © Andrey Rudakov/Bloomberg Sunflower oil - Andrey Rudakov/Bloomberg

Supermarket sunflower oil prices are set to remain sky high well into next year, despite a sharp fall in wholesale costs when a deal was struck to keep shipments flowing from Ukraine. 

Wholesale sunflower oil prices have more than halved following an initial jump in March at the start of the war – but supermarkets have not reduced how much they charge to buy bottles on the shelves, according to Telegraph analysis.

In some cases, shoppers are still paying around twice as much as before the Russian invasion.

The price of sunflower oil initially surged in the UK’s supermarkets as availability was hammered by the conflict. Ukraine and Russia are two of the world's largest exporters of sunflower oil.

It reached a high of €2,635 (£2,264) per metric tonne in March, according to data from commodity experts Mintec.

As a result, retail prices in the UK jumped. Waitrose, Tesco and Morrisons began rationing sunflower oil purchases, and some consumers were even reported to be stockpiling the ingredient.

The global price has since returned to normal, falling steeply since Russia and Ukraine reached an agreement to allow the export of commodities from Black Sea ports. By November 22, the price per metric tonne had fallen 52pc from its March high to €1,255 (£1,078).

Gary Lewis, chief commercial officer of oils supplier KTC and president of the National Edible Oil Distributors Association, said: “Although prices on crude sunflower oil has dropped, that doesn’t tell the full picture. Crude sunflower oil isn’t the same as the refined sunflower oil we get in the supermarkets.

“Refined sunflower oil is still in short supply, and the prices reflect that. Supermarkets bought their current supplies of sunflower oil in the Autumn as soon as it became available.

“Currently, there is no spot market for refined sunflower oil – and it won’t be available until February or March. There simply isn’t the supply available in the market.”

A 1l bottle of Asda Sunflower Oil had a base price of £1.19 before the war and is now £2.40, according to data from retail insight firm Assosia. The base price of a 1l bottle of Sainsbury's Oil was £1.09 before the war and is currently £2.40. Both retailers nudged those prices up slightly as recently as early October – from £2.10 in Sainsbury’s and £2.30 in Asda, the data shows.

Tesco, meanwhile, was selling a 2l bottle of Flora Pure for £4 before the war, yet is currently selling a 1l bottle for £4.20 online. A 2l bottle of Flora Pure was being sold at £7.55 in Morrisons at the time of writing.

A spokesman for Morrisons said: “When it comes to the price of cooking oil, there are a wide range of factors to take into consideration over and above just the raw ingredient.  

“These include the cost of packaging, energy and labour. This is an unprecedented period of inflation and we are working hard to keep prices down and competitive for our customers.”

Discounters have also put up their prices. A 1l bottle of Aldi’s Solesta sunflower oil was sold at £1.09 prior to the war, and is currently listed on its website at £2.10.

One source at a major food brand said they expected to see prices cut in 2023, led by Aldi and Lidl.

Russia and Ukraine’s agreement was extended for another 120 days on November 18th. However, Roxanne Nikoro, an analyst at Mintec, said that global supply could be seriously affected again if the deal was compromised.

Ms Nikoro said: “In addition to lower year-on-year production from Ukraine, the oil quality coming out from the country on the back of adverse weather conditions would be a  watchpoint in the coming months, as this would mean reducing the volume of oil adequate for use in food.”

Global production is expected to rise by just 1.3pc for the 2022/23 marketing year, with Ukrainian output down 12pc, according to Mintec.

Sainsbury’s is still warning shoppers some products may not be available when searching for sunflower oil on its website.

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