Pesto businesses are facing a mounting crisis, with the war in Ukraine impacting their ability to source sunflower oil.
A large portion of the global supply of sunflower oil comes from Ukraine and Russia. Suppliers of sunflower oil are understood to have issued some suppliers with force majeure notices.
“They are saying ‘OK, you are under contract but because of the war, we cannot guarantee the price of the contract or the supply,” said Luciano Chiumiento, sales director at Clas Pesto.
This had sent pesto brands flocking to the spot market – and desperately searching for alternatives such as refined olive oil, rapeseed and even soya oil, he added.
“These are the three main alternatives, and our technicians are developing and doing taste tests on them.”
Saclà UK MD Claire Blampied said Saclà did not anticipate shortages of its products and was “working hard to find the best solution in terms of quality and price”.
However, there are issues with the proposed alternatives. With refined olive oil there was “a huge cost implication as olive oil costs approximately four times sunflower oil”, said Filippo Berio CEO Walter Zanre.
“There is also real concern that there is insufficient refined olive oil available to meet the demands of the pesto industry.”
Indeed, global sunflower oil production was 22 million tonnes over the 2021/22 period, according to Statista, while global olive oil production was three million tonnes [International Olive Oil Council].
Belazu purchasing director Nick Henderson said the brand benefited from “shorter supply chains and had been able to source European grown rapeseed oil to ensure continuity of supply to our customers”.
“However, this has come at a price, with our latest contracts costing up to 65% more than our previous sunflower oil, with global prices remaining very volatile.”
Meanwhile, the Food Standards Agency and Food Standards Scotland agreed to relax labelling rules this week to allow retailers and suppliers to switch from sunflower oil to rapeseed oil without changing labels.
Talks are said to be continuing on whether wider relaxing of labelling laws will be allowed to try to counter shortages caused by the war.
With rapeseed and soya oil, Chiumiento said there was some uncertainty as to whether switching to them could affect shelf life.
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