War forces switch from sunflower to palm oil as costs rocket 1,000%

29 March 2022

It is “crucial” palm oil production remains ethical as firms including supermarket Iceland are forced to find alternatives to sunflower oil due to the war in Ukraine.

The Roundtable on Sustainable Palm Oil (RSPO) said demand for palm oil was rising because Russia and Ukraine are responsible for 70-80% of sunflower oil, which has gone up in price by 1,000%.

A spokesperson told Supply Management: “A balanced market with a mix of different available vegetable oils is crucial for a robust and resilient global market. Ukraine is the largest exporter of sunflower oil and seed, and as the rise in demand for palm oil is accelerated by halted sunflower oil production in the Ukraine, it is crucial that we support the production and consumption of sustainable palm oil to prevent any further negative environmental and social impacts.”

The comments follow Iceland's announcement that it will be rowing back on a 2018 commitment to boycott palm oil in its own-brand products due to its links with deforestation.

In a blog Iceland boss Richard Walker said sunflower oil had become “totally unobtainable” and the decision to reintroduce palm oil was “strictly a temporary move”.

“I say this with huge regret, but the only alternative to using palm oil under the current circumstances would simply be to clear our freezers and shelves of a wide range of staples including frozen chips and other potato products,” he said.

“So we have agreed to use certified sustainable palm oil – as a last resort and as a strictly temporary measure – in a limited range of Iceland own label products that will begin to appear in our stores from June. All packs will of course clearly show palm oil in the list of ingredients where it has been used.

“This is a serious emergency and one that requires tough choices and compromises if we are to achieve our prime objective of continuing to feed the nation and of delivering affordable food to those on tight budgets, who will inevitably be those worst affected by the unprecedented pressures now building up in our supply chains.”

However, Walker questioned the effectiveness of using sustainable palm oil, saying: “Massively increasing global demand for palm oil inevitably means continuing pressure on the globally important tropical rainforest areas where it is grown, and I therefore remain sceptical as to whether there ever really can be any such thing as truly ‘sustainable palm oil’ available in the mass market where Iceland operates.”

Limited supplies of sunflower oil have raised prices of alternative oils, including rapeseed and palm, Walker said. 

Russia and Ukraine also account for about 45% of rapeseed production, which is imported to the UK to be made into cooking oil.

In 2012, the UK government set a commitment for 100% of the palm oil used in the UK to be from sustainable sources that don’t harm nature or people. In 2019, 70% of the total palm oil imports to the UK were sustainable. 

The RSPO spokesperson said: “The RSPO encourages companies who need to make the switch to other oils, like palm oil, to do so in a responsible manner by choosing certified sustainable palm oil. RSPO certified sustainable palm oil is produced according to strict criteria which includes preventing deforestation and exploitation of workers and local communities.”

Iceland has been the only major UK supermarket to boycott palm oil in its supply chains. 

Tesco, Aldi, M&S, Lidl, Morrisons and Sainsbury’s instead all use RSPO-certified palm oil in their own brand products. 

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