Food In Canada

The world is running out of vegetable oil

By Dr. Sylvain Charlebois   

Processing Ingredients & Additives Russia supply chain Ukraine vegetable oil

Funny how sometimes we take the simple things in life for granted. Cooking oil, or vegetable oil is certainly one of them, and our appreciation for vegetable oil will likely reach new levels in months to come. That’s right. Prices have increased by 25 per cent just in the last six months. While palm oil went up 50 per cent, canola oil is up 55 per cent on average. The world is slowly running out of vegetable oil.

Vegetable oils are not just about frying things. The ingredient is in many things we eat. All household kitchens and restaurants use vegetable oils. Major companies will buy vegetable oils to manufacture the food we buy daily. Pasta, cookies, chocolate, cookies, mayonnaise, many dry and baked goods contain vegetable oil. It is one of the most universal and versatile ingredients we have at our disposal.

Palm oil is the big one, given how affordable it is. Recently, Indonesia, the largest producer of palm oil in the world announced that the country would no longer export palm oil. The embargo started last week on April 28. Indonesia accounts for 55 per cent of palm oil exports. It’s huge. Since the price of palm oil had increased by 40 per cent in the country, the government believed it had no other choice. Malaysia, the second largest exporter, is experiencing unprecedented labour shortages affecting palm oil production. The country accounts for 31.2 per cent of palm oil exports, according to the Observatory of Economic Complicity.

Although many condemn the use of this oil for environmental reasons, the fact remains that several companies in the field buy this product. Nestlé, Mondelez, Ferrero Rocher, most of the big food companies need it and we eat it every day.


For sunflower oil, the situation is even worse. Ukraine is the largest exporter of sunflower oil in the world. The country exports around 5.4 million tonnes of sunflower oil, half of the quantities found across the globe. Russia, responsible for 25 per cent of sunflower oil exports, will have difficulty finding customers due to sanctions imposed against it.

For canola oil, Canada, the largest exporter, must contend with last year’s abysmal season. The drought was so severe that we had to import Canola to meet our demand for vegetable oil. So, there are hardly any reserves to start 2022.

Finally, there is soybean oil. Argentina, Paraguay, and Brazil are among the largest exporters of soybean oil. The three countries are also hit by major droughts, and anemic production in recent years has created supply problems everywhere.

Even if major exporting countries like Holland and Germany have good harvests this year, it will not be enough to cover the anticipated deficit this year, and possibly next year. Yes, vegetable oil, the importance of an ingredient that we have all taken for granted in our kitchens, will be much more evident.

What could help though is to lessen the amount of vegetable oil used for energy. About 15 per cent of all vegetable oils are used to support the production of biofuels. We could perhaps see some countries divert some of that production for more vegetable oil, but that’s not a given. Far from it.

As we navigate through this global food crisis, we are expecting more countries to instinctively ban exports and even hoard commodities to secure food supplies. Each decision will add more pressure to the market, raising prices across the board. Over the next several months, things will most certainly get ugly to a point where many will experience famine or acute hunger.

Despite all of this, as Canadians, we’re the lucky ones. If your grocer is rationing vegetable oil, don’t be surprised. As consumers, we should feel lucky just to have access to some vegetable oils.

Dr. Sylvain Charlebois is professor and senior director, Agri-food Analytics Lab, Dalhousie University.

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