Cooking Oil Prices
Last week, Statistics South Africa reported that the price of cooking oil had increased by 21.6% over the last year. That’s a huge increase! Our understanding is that this figure represents increases in the prices of sunflower and canola oil. How do these two cooking oils compare in price? Both are considered to be staple food products in South Africa, and are zero-rated. How about olive oil prices - have they also increased? We wanted answers to these questions. In this post, we’ll share what we discovered.
Current Average Prices
First, let’s take a look at the most recent (27 May 2021) average prices of canola, sunflower and olive oil. We’ll compare the prices of these products sold in 750ml bottles.
As you can see, on average, olive oil is much more expensive than canola and sunflower oil. Canola and sunflower oil are similarly priced, but sunflower oil is more expensive at the moment. Keep this in mind, because we’re going to look at the relative price changes of these products next.
Average Prices Over Time
How have the average prices of these products changed over time? Here, we’re looking at all product sizes, not just 750ml bottles.
First up: sunflower oil.
The price of sunflower oil has increased by 23.8% over the last year! That’s a massive increase, way above food price inflation (6.5% in April 2021). In particular, in the last three months, the price of sunflower oil has increased by more than 15%!
How about canola oil?
Canola oil has increased by 28.8% over the last year. That’s not quite as much as for sunflower oil, but still a huge increase. Interestingly, there are fewer canola oil products available in comparison with sunflower oil.
As we noted earlier, olive oil is much more expensive than canola and sunflower oil. How have prices changed over the last year?
Olive oil prices have only increased by 6.7% over the last year. That’s a much smaller price increase than those for canola and sunflower oil. If you prefer to cook with olive oil and you can afford it, then you may be pleased to read this. However, for most South Africans, olive oil is too expensive and would not be used as an everyday cooking oil.
South Africa offers a favourable climate for growing both sunflowers and canola, and it produces relatively large volumes of both crops. Why have canola and sunflower oil prices increased so much over the last year? It’s hard to answer this question definitely, but we do know about some of the circumstances which may have lead to price increases.
Earlier this year, agriorbit.com suggested that the sunflower harvest in South Africa might be 19% lower than it was last year. This is mainly because some South African sunflower farmers are choosing to prioritise maize crops and are planting fewer sunflowers. There is also a global shortage in sunflower seed, due to a drought in the Black Sea region and a reduced harvest in Argentina.
It’s more challenging to find clear information about the status of local canola supplies, but there have been reports that the Winter grain and oilseed harvest for 2021, which includes canola, could be the largest on record. This is good news, because global canola supplies are under pressure at the moment, mainly because of increased demand (from China in particular).
Another thing to consider is that for consumers, sunflower oil and canola oil are relatively interchangeable. It may be that when the price of one of these products increases, the price of the other also increases.
As you can see, there are lots of factors involved here, and in order to draw any firm conclusions about the underlying causes for these price increases, one would need to conduct a more in-depth analysis. This is not the goal of this post. However, we do think that it’s important to highlight how dramatically the prices of canola and sunflower oil have increased, because these are considered to be essential food products in South Africa. Very soon, these products will become unaffordable for many households (if they aren’t already too expensive). Let’s hope that there is some price relief ahead.