Ukraine conflict, sunflower oil | The grocery giant is struggling to supply raw materials: – completely empty until October

– Sunflower oil is no longer obtainable. This is what Christopher Harlem, CEO of the Harlem Group, tells Nettavisen. The trading house handles 300,000 tons of raw materials per year.

Harlem says that the problem arose immediately after Russia occupied the war.

“Maybe I’ll get some volume in October when the new crop comes in,” he says.

Since the war broke out on February 24 this year, sunflower oil prices have skyrocketed and are now three times more expensive than last year. The commodity expert does not believe that there will be a new crop of sunflowers from Ukraine at the moment.

In both Germany and Spain, the rationing of sunflower oil in grocery stores has long been introduced.

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Orkla: – We are intensively working on alternatives

Orkla is a supplier of brands such as Grandiosa, Stabburet, Toro, Nidar, Kims and Sætre. Food giant delivers to the food market, restaurants and hotels. In addition to Norway, the listed company supplies the Nordic countries, the Baltics and selected Central European countries.

Last year, the company achieved the highest operating result ever.

Almost ten years ago, the food industry started replacing palm oil with sunflower oil in many well-known brands. Gradually, the recipe was replaced in Nougat, Mariekjeks, Ritz cookies, Smash and several cookies of the well-known cookie factory Sætre.

Maarud and Kims fry several snack products in sunflower oil, the popular oil is also used in soups, sauces and mayonnaise.

Orkla Nugatti, Marie- and Ritzkjeks advertise that they use sunflower oil. In nougat, sunflower oil is the most important ingredient.

On March 13, through the Norwegian Food Safety Authority, it became known that a number of food producers experienced a failure in the supply of certain raw materials as a result of the war in Ukraine.

– Due to the consequences of the Ukrainian war on the food industry, the entire Norwegian food industry is currently working intensively on alternatives. We have significant work ahead of us, Orkla’s Head of Communications Håkon Mageli tells Nettavisen.

A shortage of sunflower oil may mean that food manufacturers have to change or replace the composition of their products.

Therefore, food manufacturers were encouraged to label their products correctly to ensure food safety for Norwegian consumers.

– In a couple of months, there could be a shortage of goods mainly from Russia and Ukraine, such as wheat, cooking oils and packaging, managing director Petter Haas Brubakk noted in the NHO Mat og drikke magazine, until Nettavisen reported that the shortage became known.

Orkla has previously told Dagbladet that certified palm oil is one of the options they are exploring.

Mageli will announce on Monday that they have a number of finished products that they are currently evaluating.

After it became known that Orkla is struggling with the availability of raw materials in production, the company has been reserved when commenting on the matter.

Several EU countries have introduced vegetable oil rationing in some grocery stores, but Norwegian grocers say they are now in control.

– As of now, our stores have good access to both sunflower oil and rapeseed oil. Therefore, it is not relevant for us, Kine Søyland, head of communications at Norgesgruppen, tells Nettavisen.

Norgesgruppen is behind Meny, Kiwi, Spar and Bunnprise, among others. The company is Norway’s largest grocer with a market share of 44 percent. Coop claims the same.

Read also: Ukrainian war doubles prices: – We never get offers

The prices of sunflower seeds have skyrocketed

According to Harlem, the prices of sunflower seeds have increased three times. If trading houses do not receive sunflower oil, they switch to rapeseed oil. Harlem says almost all producers are covered in canola oil for the rest of the year. European industry and consumer goods have contracted supplies until the end of the year – some until 2023.

– Rapeseed oil cannot be offered before 2023. In general, the capacity is blown if you want decent volumes. You’ll have to wait until next year to get it. The price of rapeseed oil has doubled because sunflower oil is in short supply. The same goes for soybean oil.

He says there are currently no offers for corn oil either.

Meanwhile, shipping rates continue to rise. According to Harlem, it currently takes four to five months to receive a container of raw materials sent to Norwegian ports.

– There are delays throughout the system and there is a bidding process on board for which containers can be added, he says.

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