March 4, 2022
The economic reverberations of the Russian invasion of Ukraine are being immediately felt around the world. In Iran, already-extortionate cooking oil prices have reportedly jumped again in the last week as a consequence of the assault.
Abolhassan Khalili, chairman of Iran’s Vegetable Oil Trade Union, said on Wednesday, March 2: “Currently, global market prices of oil seeds and other cereals are rising. This not just a problem for our market but an international issue.” He went on to assure the public that Iran had “a considerable strategic reserve of cooking oil”.
Iran produces just 10 percent of the vegetable oil it consumes, with the rest imported from abroad and principally from Ukraine and Russia. In 2019 Ukraine accounted for 45.8 percent of sunflower seed and oil exports, Russia 23.4 percent. In the same year Iran was the world’s fourth-largest importer of both, taking in 6.25 percent of global imports, and received more than 37 percent of its sunflower oil from Ukraine in 2020.
Also this week, Iran’s Feed and Grain Importers Union warned that the Russian invasion could “cause problems” for livestock feed and grain imports to Iran. Supply chain blockages brought about by sanctions and airspace bans could lead to delayed deliveries, the Union said.
A member called on Tehran to diversify and increase imports from countries such as Argentina, Canada and Brazil. Ukraine and Russia also account for more than a quarter of global wheat exports and nearly a fifth of corn.
Even before the current concerns, the chairman of Iran’s Food Wholesalers Union had raised the alarm over a reported 35 percent drop in food sales in Iran due to inflation, together with a simultaneous 35 percent hike in cooking oil prices. Despite the clear risk to Iranian food security, for now the government outwardly supports Putin’s invasion of Ukraine.