Cheaper raw materials won't mean cheaper cooking oil

Cooking oil.
Cooking oil. Source: ERR

Over the past two months, the price of the raw material used to produce rapeseed oil has decreased by nearly €200 per ton, or up to one third. Rapeseed oil prices on store shelves, however, won't be following suit.

According to Talis Raak, head of purchasing at Rimi, the retail price of cooking oil increased 20-30 percent at the beginning of the first quarter. Prices stopped rising in April.

"In the case of both sunflower and rapeseed oil, the primary factor in the price decrease was mainly a restored supply chain, and at the moment, product availability is rather good," Raak told ERR.

Producers are nonetheless skeptical about further costs, however, as several countries have reduced yield forecasts for this year.

Alo Süvari, sales director at Estonian rapeseed oil producer Scanola, confirmed that the cost of the raw material used to produce rapeseed oil has gone down in recent months, but uncertainty over the future persists.

According to Süvari, the price of rapeseed fluctuates daily. "Volatility has increased quite a bit," he said. "While daily changes used to be €10, they're significantly bigger now. The record is €60-70 in a day."

He acknowledged that it was difficult to gauge how much the retail price of rapeseed oil may change for buyers, noting that April's peak prices didn't reach store shelves either.

"In a broader perspective, prices are going up," the sales director said. "Compared with right now, they may not [increase]."

Nevertheless, he continued, long-term price changes will reach consumers as well.

"All cooking oil prices have doubled on year — there's a Ukraine-sized hole in the market at the moment," he explained. "When the price of cooking oil goes up, milk, butter — all animal and also plant products will go up as well."

According to Martin Miido, communications director for supermarket chain Coop Estonia, a shortage of sunflower oil has increased demand for other cooking oils at their stores. On year, cooking oil prices at Coop stores, which include Konsum and Maksimarket supermarkets, have as much as doubled.

Despite the price increase, retailers say that cooking oil sales have remained steady.

Rapeseed oil in Estonian supermarkets currently costs an average of nearly €3.50 per liter.


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Editor: Aili Vahtla

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