Soaring demand, exacerbated by flooding in the United States which caused crop reductions of 10%, has already pushed up retail prices of cooking oil.
One litre of own-label sunflower oil now costs £1.35, up from 58p a year ago, says olive oil producer Filippo Berio, while vegetable oil has risen from 56p to £1.19 in Tesco. “Price inflation at source for both vegetable and sunflower oil is massive,” said Walter Zanré, UK MD of Filippo Berio. “Prices have doubled in the past 12 months, driven by demand for biodiesel. Bottlers are competing for raw material with companies refining product for use as a fuel,” he said.
One industry source said the “market was in mayhem” with soaring mineral oil prices showing the situation could only get worse. Olive oil producers are also feeling the pressure, but believe their own market will prove resilient due to the superiority of their product, and that the rising price of cooking oils will prompt people to switch to light olive oil. The trend could help light olive oil go from 13% of olive oil sales to 17%, said Zanré.
Olive oil brand prices were currently stable, but own label was beginning to show increases, he added. “We are seeing cost increases of 16%, driven by the weakness of the pound against the euro and energy costs,” he added. “That will be reflected in prices on shelf, while glass alone is going up 30%.”
Focus on Oils p39