- Consumers can expect to pay about 15% and 30% less for canola and sunflower oils in the next two months.
- Cooking oil supplies from Ukraine, which South Africa relies on, have started to stabilise and will help bring prices down.
- Sunflower oil may come down to R79.99 for 2 litres’ worth, which at one point during the Russian war reach R120.
Consumers will breathe a sigh of relief with cooking oil prices expected to cool in the next two months, with cuts of up to 30% on the cards, leading South African oil producer Southern Oil (SOILL) has said.
The price of sunflower oil is expected to decrease by 25% to 30% to reach a price level of R84.99 to R79.99 for 2 litres’ worth, Morne Botes, commercial director for SOILL, which owns the B-Well and African Gold oil brands, said.
On promotion, sunflower oil could reach between R74.99 and R79.99, he said
Consumers can also expect a price decrease of 12.5% to 15% for canola oil prices, pushing it down to R99 for everyday prices, while promotional prices are expected to decline to between R74.99 to R79.99, he said.
Supplies of canola and sunflower oil from Ukraine have begun stabilising after Russia’s nearly six-month-old war in Ukraine initially sent prices soaring. The war also erupted during Ukraine’s critical March/April oilseed planting season, which posed a risk to 2023 harvests.
At one point, the price of sunflower and canola oil surged 55% and 40% over two months, and a 2 litre bottle of sunflower oil fetched R120.
“The supply of both Rapeseed/Canola and Sunflower oil out of the Ukraine has had a positive impact on the decrease in the global cooking oil prices, along with a better-than-expected production outlook towards [the] end of the year and 2023,” Botes said.
Botes said the impact of the cooling global edible oil prices should be seen on other products that use sunflower and canola oil as key ingredients in their production processes.
Although South Africa produces vegetable oil, it does not make enough to meet local demand, which is growing at 2% annually. Therefore, it is a net oil importer and relies on the Black Sea region for the rest of its oil. The country only produces 800,000 MT of oil per annum and imports 30% of its demand from other areas.
“Moving forward, the pricing on vegetable oil could be further influenced by the energy sector and the decisions taken by government to increase or decrease the biodiesel mandate in the European Union, especially considering the increased demand of energy during Europe’s winter season,” Botes said.
“With that said, further weather-permitting decreases are expected towards [the] beginning of 2023. On a positive note, the overall base on vegetable oils have lifted, and levels pre-Covid is not expected to be seen very soon,” he said.