FX.co ★ Germany moving into sunflower oil deficit

Economists predict that Germany will run a deficit of sunflower oil shortly for the same reason that lies behind headwinds around the world.

German food producers brace for a shortage of sunflower oil on the back of simmering geopolitical jitters in Ukraine. The Association of oil crop producers (Verband der ölsaatenverarbeitenden Industrie in Deutschland) acknowledges that Ukraine has always been one of the leading sunflower oil suppliers on the global scale. However, the hostilities in Ukraine are playing havoc with the food industry around the world.

Currently, Ukrainian suppliers cannot guarantee nonstop deliveries of sunflower oil across the Black Sea. Such bottlenecks are set to persist in the visible future, experts say. Importantly, Ukraine accounts for more than 50% of the global sunflower oil exports.

Thomas Geppert, the state manager of the hotel and restaurant association DEHOGA, confirmed a spike in retail prices of sunflower oil. Earlier, Guido Zeitler, the head of the NGG industry labor union (Nahrung-Genuss-Gaststaetten), warned that the full embargo on Russian gas imports if imposed by the EU would entail the apocalypse in Germany’s food industry.

The boycott of Russian gas suppliers will cause a chain of long-term economic repercussions. Crippled by the shortage of Russian gas, food enterprises will have to slash their capacity. Notably, the fallout would be disastrous beyond the food industry. Such disruptions in production will eventually put a strain on households, analysts summed up.