Bloomberg news reported that a series of small roadside eateries in India have had to reduce their consumption of palm oil and switch to cheaper dishes such as boiled and stewed food. Ivory Coast has had to reduce the size to save on raw material costs as well as affordable for customers.
In the US, sandwiches also have less and less slices of bacon, and pizzas have reduced ingredients to balance costs in a time of material shortages and high inflation.
According to Bloomberg, the supply chain has not yet recovered and there are many shortages in the post-Covid-19 epidemic, as well as being affected by the Russia-Ukraine conflict, which has caused a series of goods such as bread, fresh meat and cooking oil to increase. strong price.
As a result, many regions like Yemen, which import 90% of their food from the conflict zone, will suffer catastrophic famine. Meanwhile, economists warn that the current situation will create a “Demand Destruction” effect, referring to the high prices of goods that make people not dare to buy.
“Price increases are so strong that people have to cut spending,” said Julian Conway McGill of consulting firm LMC International.
Miserable because of cooking oil
Bloomberg news agency said that cooking oil is commonly used in the food sector and is indirectly causing this industry to fall into crisis due to lack of supply. The world’s main cooking oil exporters are facing labor shortages after the pandemic as well as bad weather.
In addition, the Russia-Ukraine conflict affected trade and pushed the prices of a variety of cooking oils such as soybean oil, palm oil, etc. to record highs. Although many governments have stepped in to limit exports and impose price ceilings, the situation is still not satisfactory. The price of everything is so high that consumers from Asia to Europe have to tighten their pockets and limit spending.
Mr. Raju Sahoo, the owner of a restaurant in India had to reduce the daily amount of palm oil purchased to 15kg by limiting the serving of fried dishes, increasing the amount of boiled and steamed food.
“Now I only dare to make 300-400 pies a day compared to about 1,000 before. I switch to boiled-steamed dishes instead to increase the choice for customers,” Mr. Raju told Bloomberg news agency. .
In Malaysia, the world’s second-largest palm oil exporter, output has fallen sharply due to a shortage of workers. In Canada, drought is ravaging canola fields, while erratic climate affects soybean harvests in Brazil and Argentina.
In Russia and Ukraine, which account for 75% of the world’s sunflower oil exports, the conflict caused prices to skyrocket due to a lack of supply.
The price increase of the four main cooking oils, palm oil, soybean oil, canola oil and sunflower oil, has pushed up a range of foods, from confectionery to chocolate. According to LMC, the price increase has pushed regions like South Asia or Africa into unprecedented poverty. That is not to mention a series of businesses that cut product sizes to change according to the market.
From fertilizer to dining table
In Ivory Coast, the Organization for the Sale of Sweets (OBE) is considering reducing the size of the product because the price of this item is fixed by the government, so they have to adjust themselves when the wheat material increases sharply due to the conflict between the two countries. Russian-Ukrainian conflict.
More dangerously, Fitch Solutions analyst Brice Dunlop warned that a shift in people’s dining tables could trigger social upheaval.
“India has had a lot of riots related to shortages of food ingredients, while cooking oil is the main ingredient for cooking here,” Mr. Dunlop warned.
In Brazil, farmers like Zilto Donadello have had to cut their soybean fields by 30-50%, despite the reduction in yields. The farm owner stopped buying more fertilizer from September 2021 in hopes of falling prices, but the Russia-Ukraine conflict has made the situation worse.
According to Donadello, the price of soybeans has increased, but that is not much compared to the cost of producing them.
“The risk is too high and the return is too low,” said Mr. Donadello.
Similarly in the US, owner Joe Fontana grilled chicken in the state of Chicago is also struggling because of rising costs. Fontana’s 5 restaurants have had to stop using vegetable oil and switch to fat frying. But even tallow is increasing in price as demand for it as an alternative to diesel fuel is increasing amid the high price of gasoline.
“Since the beginning of 2021, everything seems to be up 100 percent,” sighs Fontana, noting that 50-pound beef fat that cost $29 years ago has now grown to $56.
As a result, Fontana’s restaurants have had to raise the price of grilled chicken sandwiches above 10 USD/piece and will increase further if inflation continues as it is. Customers lamented the price, but Fontana couldn’t do anything if she wanted to keep the costs of opening a restaurant afloat.
Not only chicken shops, Rabobank analyst Christine McCracken warned that pizza is now also adjusting to reduce ingredients and increase prices to maintain operations.
“Just keep an eye on food prices, you’ll see that everyone’s table is much more expensive,” warned Ms. McCracken.
By Business and Marketing
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