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Lebanon low on sunflower oil as Ukraine war sparks search for alternatives

by Mar 26, 2022Arab News

Sunflowers plants. Ukraine and Russia account for more than three quarters of sunflower oil exports. Reuters

Sunflower shortages are looming in Lebanon as war rages in Ukraine and importers scramble to find cheaper alternatives in the cash-strapped country.

Supermarkets have begun to ration sales of oil, sugar and flour, businessmen told The National.

There have been no new import requests in Lebanon for crude and pre-packed sunflower oil since Russia invaded Ukraine on February 26.

Ukrainian ships are unable to sail and stringent financial sanctions on Russia have cut off most of its economy from the world market.

“Several of my shipments that were supposed to leave Ukraine one week after the war started never left, which leaves me out of 50 per cent of supplies I had ordered for Ramadan,” said Hani Bohsali, the head of the union of Lebanese food importers.

War in Eastern Europe has affected food security across the planet. Russia and Ukraine account for more than three quarters and one-third of sunflower oil and barley exports, respectively, according to the World Food Programme.

But import-dependent Lebanon, which is two years into a severe financial collapse, is particularly vulnerable to market shocks.

Sunflower oil is hugely popular for cooking food, unlike, for example, in the US, where local taste dictates a preference for soybean oil.

Figures made available by Lebanon’s customs department show that the country imported more than half of its sunflower oil from Ukraine and a third from Russia in 2020.

The rest mostly comes from Egypt and Turkey, but that is also Ukrainian oil in disguise, said Mr Bohsali.

“Until 10 years ago, Ukraine was only active in crude [sunflower] oil exports, but then came in as a competitor to its own customers by packing its oil and selling it,” he said.

Mr Bohsali said Turkey and Egypt banned oil exports since the start of the Ukraine war.

Mohammad Sinno, owner of ZM vegetable oil industries, which refines crude sunflower oil, said importers were “working on options”, including buying from Bulgaria and Romania.

But this would be an expensive option as pressure mounts on those countries to supply European markets, said Luc Doumet, chief executive of Societe Des Huiles Et Derives, which refines crude sunflower oil.

Supermarkets in Lebanon have started rationing sales of oil, sugar and flour. Mahmoud Rida

The war in Ukraine caused the prices of sunflower oil, already on the rise in the past three years, to surge by 30 to 40 per cent, according to importers, a further burden for impoverished Lebanese customers after food prices increased by 396 per cent in February.

In the meantime, Lebanese supermarkets are rationing sales, with some small shops keeping stocks in a back room and selling no more than one bottle of sunflower oil to their most loyal customers.

“We are just not receiving enough,” said one shop owner in Beirut.

Customers asking for flour or sugar receive a similar response. Before the war, Ukraine was a major wheat exporter to Lebanon, which is also rushing to find alternatives to its main sugar supplier, Algeria.

Lebanese importers said Algeria stopped sugar exports at the start of the Ukraine war.

Rationing sales is a way to limit panic-buying and make stocks last longer, said Mr Bohsali. Lebanese refiners have noticed a surge in demand from supermarkets and some importers, who used to buy pre-bottled sunflower oil but are now looking for local alternatives.

However, evaluating how long current stocks will last is difficult because Lebanese customs officials have yet to release import figures for 2021 due to technical difficulties.

Mr Bohsali calculated that current sunflower oil stocks can last for “a couple of months as long as sales are rationed”.

Importers believe the Ukraine war will force Lebanese consumers to eventually become used to soybean oil instead of sunflower oil.

“I see some shortages in the short term and readjustment in the long term, with Lebanese refiners buying soybean oil from Argentina and the US,” said Mr Sinno.

1 JUNE 2017-BEKAA, LEBANON Cheese samosas are fried, and Moughrabieh (Lebanese dish) is cooked in preparation for Iftar at the Jaroush family. Four generations gather every day during Ramadan to break their fast at Sara���s (the great grandmother) home which brings the Jaroush family together. Natalie Naccache for The National.ID#888888 *** Local Caption ***  NN_IftarSara_0020.jpg

This will be less convenient than importing foodstuff from Ukraine, which used to be favoured across the Middle East because of its relative proximity. Shipments took ten days to arrive, compared with about two months when sourced from the Americas, said Mr Sinno.

The Lebanese people will have to endure a slight change in the taste of their fried food and mayonnaise.

“It is a question of habit and cultural preference,” said Mr Doumet. “In the end, differences are very slim between one oil and another.”

The only oil produced in Lebanon is olive oil, which is not a viable alternative because it is two or three times more expensive than other vegetable oils and is not suitable for frying, said importers.

The switch to soybean oil, however, might not be smooth. Societe Des Huiles Et Derives, which is the only Lebanese factory that has the capacity to extract oil from crushed soybean imports, produces enough oil to satisfy 35 per cent of the local demand in vegetable oil.

“We are seeing potential shortages but there are crush plants in the Mediterranean and available quantities that could be brought in and refined in Lebanon,” said Mr Doumet.

Lebanon could also buy soybean oil from the Americas but that would increase transport costs.

Mr Doumet remained optimistic.

“The situation is not alarming yet. We still have room to find solutions,” he said.

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