Sunflower oil is up 55%, canola 40% … worse is still to come

NTANDO THUKWANAIN just two months, the price of sunflower oil has surged 55% and canola oil has increased by 40%, though the increases will only start to reflect on retailer’s shelves in the next 30 days.

In South Africa, consumers can expect oil to be priced between R99,99 and R119,99 for 2-litre’s worth, Morne Botes, commercial director for SOILL, which owns the B-Well and African Gold oil brands, told Business Insider South Africa.

Botes said the increases are currently being managed by producers, manufacturers, and retailers and will be phased in slowly to prevent panic buying and to sell the available stock at a fair price.

“The increases are coming… Some pricing might already have changed, but the full change in price is not visible yet,” Botes said.

The Russian invasion of Ukraine sent prices of several essential commodities soaring, including edible oils such as sunflower oil – which was already in short supply over the last few years after poor harvests of sunflower, palm, soya, and canola in crucial regions of the world.

The war also erupted during Ukraine’s critical March/April planting season, which bodes poorly for prices going into 2023.

“The risk is also not just on edible oil for consumption that we purchase in store, oil is an input in most of your favourite products you buy in store (i.e., margarine, sauces, crumbed products, etc.), so all these product’s prices are affected as well,” Botes said.

“Prices for the next six months at least will remain at these elevated levels and depending on the European canola and sunflower crop in September/October – whether it’s a ‘good or bad ‘ crop, will show if it remains for longer or if we might see some relief on pricing,” he said.

Although South Africa and Namibia both produce vegetable oil, they do not make enough to meet the demand.

Some consumers have already started to notice an increase in the price of cooking oil.

Botes said that retailers might run fewer promotions on oil due to the increases.

“The ability to promote at ‘low ‘ prices will not be possible and promoting at too ‘low ‘ prices will lead to out-of-stock situations as consumers will jump at the opportunity. So, more likely than not a “everyday low price” strategy might be followed instead of a deep cut promo strategy,” he said.

– Business Insider SA

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.