FRYING IN UNCERTAINTY:
HOW SUNFLOWER OIL’S PRICE SWINGS IMPACT THE FOOD INDUSTRY Sunflower Oil and the Global Potato
Processing Industry
The global potato processing industry, a multibillion-euro sector ranging from frozen French fries to premium snacks and crisps, is increasingly reliant on sunflower oil. Valued for its light taste, high smoke point, and perceived health benefits, sunflower oil has become a preferred frying medium for major potato processors. Yet, this dependency exposes the industry to the volatility of global commodity markets, where sunflower oil prices are at the mercy of geopolitical tensions, climate conditions, and shifting agricultural policies.
Sunflower oil is extracted from sunflower seeds, a crop cultivated predominantly in Ukraine, Russia, and the European Union. These regions collectively account for over 75% of global sunflower oil production, making the market highly concentrated. Ukraine alone historically supplied nearly half of the world’s sunflower oil, positioning it as a key player in the edible oil supply chain.
Worldwide seed production has grown steadily over the past decade, driven by rising global demand for plant-based and non-GMO oils. Sunflower oil’s appeal in the potato processing industry lies in its ability to enhance flavour profiles while offering a healthier alternative to palm or partially hydrogenated oils, which contain trans fats. As consumer preferences shift toward clean-label products, multinational food companies are increasingly reformulating recipes to incorporate sunflower oil.
PRICE VOLATILITY AND SUPPLY CHAIN CHALLENGES Despite its advantages, sunflower oil remains one of the more volatile edible oils in terms of pricing. The Russian invasion of Ukraine in 2022 sent shockwaves through the market, causing prices to soar as supply routes were disrupted. Futures contracts on edible oils saw double-digit percentage increases, and food manufacturers scrambled to secure alternative supplies from Argentina and the EU.
According to USDA figures, the sunflower area in Ukraine is slowly making a comeback after war struck the country in February 2022. The total area went from 7.1 million hectares – an all-time high – to 5.7 million hectares. Last year, farmers planted 6.2 million hectares, harvesting 12.9 million tonnes. That is still 15% less than the five- year average and 2.6 million tonnes less than in the year before.
Last year, farmers in the Ukraine planted 6.2 million hectares, harvesting 12.9 million tonnes. That is still 15% less than the five-year average and 2.6 million tonnes
less than in the year before. Source: USDA
19 | ADMISI - The Ghost In The Machine | Q1 Edition 2025
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44
