Soaring sunflower oil prices leave crisp makers scrambling for alternatives

4 April 2022

UK sunflower oil supplies are expected to run out “in weeks” due to Russia’s war on Ukraine, forcing crisp companies to switch to alternative oils. 

The price of sunflower oil has risen to $5,000 per 1,000 litres, up from around £900 in December, George Taylor, managing director of crisp company Mackie’s told Supply Management

Russia and Ukraine are responsible for 70-80% of global sunflower oil, and Taylor said the situation meant it was “impossible” to buy new supplies. 

He cautioned the shortage of oil and high prices could last “a few years”, and warned the price increases could result in consumer costs for crisps rising by 20-25%. 

Taylor said the worst was yet to come. He said: “The biggest impact will come where the Ukrainians in particular will not be able to plant crops in the spring. Sunflower crops normally get planted in April and May. That's going to have an impact, which will mean this will last longer than a few months, or could potentially even last a few years until it rectifies itself.”

He explained the company was trialling crisps made with rapeseed oil. He said rapeseed oil was the only “credible alternative” to sunflower oil, due to the controversies surrounding palm and soybean oil. 

The rise in demand for rapeseed oil has caused prices to rise, even though supplies of rapeseed are secure. Taylor said rapeseed oil prices had reached around £2,000 per 1,000 litres, up from around £300. 

“There's not a lack of supply of raw materials but as this situation unfolds and progresses, we will only see rapeseed going one way as well. It's only going to go higher,” he said.

The crisp industry is being hit by cost rises on multiple fronts, with labour shortages, rising energy prices and increasing cardboard prices. Potato prices have risen between £30-£50 a tonne due to rising fertiliser prices, which Taylor said had “gone through the roof”. 

“It's a perfect storm of the wrong kind,” he said. “Some of this was impacting us before the war. There was a Brexit and Covid impact, which is now having a triple whammy with the war going on in Ukraine.”

Kellogg’s – which owns Pringles – told SM: “This crisis significantly increases the risk of food insecurity across the world.”

A spokesperson said the company sources “a small amount of ingredients” including wheat derivatives from Ukraine, adding: “We are working with our suppliers to mitigate any risks which may develop.”

Lynda Simmons, secretary general at the National Edible Oil Distributors’ Association, told SM the implications of the shortages were “complex and significant”.

While alternatives including rapeseed and soybean oil are being explored, she said: “This is not enough to offset the losses as Ukraine and Russia account for almost 60% of the market. This situation will have a major impact on the UK and EU, and global supply chains.”

The Food Standards Association (FSA) warned current sunflower oil stocks “are likely to run out in a few weeks”, and said some businesses were already experiencing “severe difficulties”.

Emily Miles, chief executive at the FSA said: “FSA and FSS [Food Standards Scotland] have been working hard to understand the recent pressures on our food supply chain and the interim measures needed to make sure certain foods – like crisps, breaded fish, frozen vegetables and chips – remain on sale here.”

Miles warned the switch to rapeseed oil could prove dangerous to some customers who suffer from rapeseed allergies if packaging is not clearly labelled following any ingredient changes. 

She said: “Retaining consumer trust remains an absolute priority for both organisations and we are urgently working with the food industry and other partners to ensure labels on food where sunflower oil has been replaced by refined rapeseed oil are made accurate as soon as possible.”

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