Cooking oil is amazing stuff. But how often do you think about what went into making it and where it may have come from?
Cooking oil can be produced from a vast range of seeds, beans and fruits. Each oil has specific characteristics that can be used in different ways in the kitchen. We’ll take a look at what they are, where they come from, what factors impact the cost of producing them and the global supply chain that transports them all over the world.
What plants make the oil we cook with and where do they grow?
In 2021, vegetable oil crops produced over 200 million tonnes of oil worldwide². The vast bulk of these came from 9 key plants. Palm was the largest source accounting for over one third of the total volume followed by soybean, rapeseed, sunflower and palm kernel. The other four make up less than 10% of global production comprising groundnut, cottonseed, coconut and olive oil.
Each of these plants has specific growth requirements influenced by how hot and wet the climate is. A rapidly changing climate and the resulting extreme weather events have the potential to devastate harvests, adding pressure to farmers with limited means to adapt quickly.
So which countries produce the most cooking oil?
As you’d expect, those producing palm and soybean oils are high on the list.
- Indonesia
- Malaysia
- China
- United States
- Brazil
- Argentina
- India
- Russia
- Ukraine
- Canada
Most sunflower oil comes from Russia and Ukraine and the current situation between them has meant looking further afield and paying higher premiums to secure supplies.
Supply shortages of sunflower oil will place new demands on more readily available oils impacting prices right across the market which has seen prices rise dramatically over the last six months.
Canada produces around half of the world’s rapeseed oil and the unprecedented heatwave they experienced through the summer of 2021 devastated harvests sending prices soaring.
Why can’t we produce more cooking oil in the UK?
Currently the only major oil crop we can grow in the UK, is oil seed rape, and while sunflowers can be grown in the south of England, cultivation is very limited. Oilseed rape is the third most important crop in the UK after wheat and barley but production had fallen in the UK in recent years with volumes down nearly half in 2020 from the harvest in 2015. That is set to change as global prices rise and farmers react to higher potential returns by planting more of the crop. UK farmers are forecast to be sowing nearly a quarter⁴ more rapeseed this Autumn.
If harvests are good, why would prices go up?
Farmers are not just at the mercy of the elements. They are also vulnerable to fluctuations in the cost of fertiliser and fuel. The prices of these things have risen sharply over the past year with fuel costs doubling in many places and the cost of some fertilisers quadrupling⁶.
This translates into higher costs to grow oil crops at every stage of the process from running the tractors, fertilising the fields and the energy used to pump irrigation systems. All have been hit by rising costs and that’s before you factor in dramatically higher shipping costs to move oils from around the world. Costs which become even more significant as we look further afield to find reliable sources of catering cooking oil.
In a global market, you need a global approach
As the UK’s leading supplier of fresh cooking oils and collector of used cooking oils, Olleco is in a unique position to source and secure high-quality oils across these markets around the world. Our procurement team works tirelessly to ensure that our customers are protected from shortages as much as possible by keeping a weather eye on oil harvests and likely market disruptions.
This approach has meant that we have been able to insulate our customers from the worst of the current oil shortages and have safeguarded reserve supplies. As with any market shortage, the greatest risk is people overcompensating and hoarding which only serves to fuel the shortage so we would urge customers not to overbuy or stockpile.
Food or fuel - Olleco gives you the best of both
Biofuels are playing an increasingly important role in providing a sustainable, lower carbon alternative to fossil fuels. Environmental regulations mean they are being blended into fuels used in vehicles such as the diesel you buy in garage forecourts. In some countries, there is widespread use of virgin crops to create these biofuels but Olleco’s approach is to ensure that used cooking oil is the primary source of biofuels.
Using virgin crops to make biofuels has attracted criticism because it pushes up the value of crops that could be used for human consumption and can contribute to food price inflation. However, by collecting and converting your used cooking oils to make biofuels, Olleco ensures that the planet gets the food value from oil crops as well as the fuel value.
This puts the biofuels we create among the most sustainable fuels on the planet. And it ensures that every drop of the cooking oil you use is put to good use and helps reduce the UK’s dependence on foreign and fossil fuel supplies.
Summary:
Sourcing oil from complex global markets is hard at the best of times but we have always gone the extra mile to work closely with carefully selected suppliers. The strong trusting relationships we have built have meant that we have been able to maintain supplies to our customers even when supply chains have been put under strain by challenges such as the pandemic, climate change and war.
To find out more about our range of fresh cooking oils and investigate potential alternative options for the oils you currently use, take a look at our website. You can then use our quote builder to tell us what you need so a member of our team can get in touch with options to suit you.
Sources
¹https://www.fortunebusinessinsights.com/cooking-oil-market-106391
²https://www.statista.com/statistics/263933/production-of-vegetable-oils-worldwide-since-2000/
³https://www.bbc.com/future/article/20200109-what-are-the-alternatives-to-palm-oil
⁴ https://www.fwi.co.uk/business/markets-and-trends/uk-rapeseed-area-shows-strong-growth-after-years-of-decline#:~:text=The%20UK's%20rapeseed%20cropping%20area,2022%2C%20according%20to%20industry%20forecasts
⁵ https://www.statista.com/statistics/301901/cooked-meats-pre-packed-and-unpackaged-usage-by-type-in-the-uk/
⁶ https://www.theguardian.com/business/2022/apr/10/uk-farmers-fear-fertiliser-fuel-feed-prices