Why cooking oil could cause surging menu prices

Published on
May 16, 2022

Source: Restobiz

Restaurants are already grappling with numerous crises that are causing pressures on menu prices, from climate change to the lasting effects of COVID-19 to the devastating effects of the Russian invasion of Ukraine on food production. In recent months, cooking oil has been adding to the maelstrom.

Global cooking oil prices have been rising since the COVID-19 pandemic began for multiple reasons, but the war in Ukraine has exacerbated that issue dramatically. The country supplies nearly half of the world’s sunflower oil, and Russia provides another 25 per cent from Russia. With three-quarters of such oil production now either halted or severely affected by the conflict, cooking oil prices are spiralling.

Vegetable oil prices hit a record high in February, then increased another 23 per cent in March, according to the U.N. Food and Agriculture Organization, per the Associated Press.

In addition, Indonesia has started restricting exports of palm oil, of which it accounts for 55 per cent of global exports.

That isn’t likely to get much better anytime soon.

A leading Canadian food industry expert has warned that restaurant operators are indicating that they are likely to see vegetable oil prices triple by the end of 2022.

Sylvain Charlebois, Dalhousie University professor of food distribution and policy, told CTV News that the Ukraine conflict, in tandem with the longer-standing factors, have created the “perfect storm” for worldwide shortages.

Charlebois says that grocery stores will also be affected, but consumers will see the greatest increase when dining out at restaurants.

“We’re going to be short of vegetable oil, and of course, around the world prices are going to rise, unfortunately,” he said. “Foodservice is a big deal when it comes to vegetable oil in Canada… so don’t be surprised if menu prices are impacted by that.

“We often think about vegetable oil as something we fry with, but when you walk into the grocery store, there’s vegetable oil in everything we buy almost,” he added.

Indeed, while many diners and chefs may have most experience with vegetable oil for frying, it is also often found in foods ranging from everything from pasta to cookies, chocolate, mayonnaise, and many dry and baked goods.

“I know a lot of people want to go out and should go out and celebrate and live a normal life, but it will cost you more at the restaurant for sure and vegetable oil prices are one of the main reasons, unfortunately,” added Charlebois.

Charlebois said Canada will be looking to use canola oil as a bumper crop this season to help combat the shortage of cooking oils, but weather may scupper that plan.

“There’s not a whole lot of moisture out west right now. Of course in Manitoba there are floods… but if you go to Alberta and Saskatchewan things are pretty dry, which is not great news for canola growers,” he said.

Charlebois stressed that Canadian chefs and consumers should look to use alternatives to vegetable oils as much as they can.

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