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Food producers reversing palm oil ban due to acute sunflower oil shortage

Posted by Rafael Moro

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A sunflower oil shortage due to the conflict in Ukraine following Russia’s invasion of the country is forcing food producers to reverse their ban on palm oil, according to an Edge Markets report on 29 March.

Together, Ukraine and Russia account for almost 70% of the world’s sunflower oil and food manufacturers had warned that supplies could run out due to crops being trapped, the Daily Telegraph wrote.

Iceland supermarket, for example, has been forced to reverse its ban on palm oil in all its own-brand products, according to the 28 March report.

The UK supermarket chain would start selling a limited range of own-label products containing palm oil from June, the report said, a reversal of the ban it introduced on the ingredient in 2018 in a stand against tropical deforestation.

“The only alternative to using palm oil under the current circumstances would simply be to clear out our freezers and shelves of a wide range of staples including potato products,” the Daily Telegraph quoted Iceland managing director Richard Walker as saying.

“The move was ‘a last resort and a strictly temporary measure’ and we will only use certified sustainable palm oil as an ingredient.”

Any products containing palm oil would list it as an ingredient, he said.

“Now that it [sunflower oil] has suddenly become unaffordable, or totally unobtainable, we are working closely with our suppliers to find alternatives,” he added.

“In many cases we can substitute rapeseed oil, but there are some recipes where the only viable substitute for sunflower oil, either because of its processing properties or taste issues, turns out to be palm oil.”

Due to the acute shortages, the food regulator had given food manufacturers the go-ahead to use rapeseed oil as a substitute for palm oil in advance of changing product labels, the Daily Telegraph wrote.

Meanwhile, palm oil prices had been steadily rising since the third quarter of 2021 due to lower-than-expected production in both Malaysia and Indonesia, the Edge Markets reported the Malaysian Palm Oil Council (MPOC) as saying on 28 March.

The conflict in Ukraine has resulted in a demand surge for palm oil, according to MPOC CEO Wan Aishah Wan Hamid.

Source: Oils & Fats Internacional (OFI)