Cooking oil prices skyrocket

That sweet sizzle of French fries hitting the fryer oil is also hitting the restaurant owner’s bottom line. Vegetable oil is the latest product to see a spike in price.

“We don’t know if these prices are going to come back down, hopefully, they do,” said Ravi Ramberran, 4 Crowns Hotel and Restaurant.

The next time you order a pound of chicken wings or a side of onion rings, you might notice the bill is pricier than you’re used to, and that has a lot to do with the increasing cost of cooking oils worldwide.

“Our oil prices have more than doubled,” added Ramberran.

Remberran, owner of the 4 Crowns Hotel and Restaurant says he used to pay 18-20 dollars for 16 liters of cooking oil and now it’s around 45 dollars for the same amount.

Remberran says food costs, in general, have all gone up however cooking oil prices have skyrocketed and as a result, he has had to charge customers more for food that requires a dip in the deep fryer.

“So now we’re selling wings for 15 dollars a pound vs before it was $8 or $9 bucks a pound.”

An associate professor with the research department of agriculture and resource economics at the University of Saskatchewan says the Ukraine-Russia war reducing sunflower oil availability in the global market, along with Indonesia putting an export ban on palm oil, and the rising price of gas hitting supply chains already impacted by the pandemic, are all contributing to the increasing cost of cooking oils.

“I think we will see a ripple effect certainly through the entire restaurant sector from the fast foods to the fine dining,” says Stuart Smyth, professor at University of Saskatchewan.

“A lot of the price increases are just due to the uncertainly of what the markets are going to look like two or three months down the road.”

Smyth says to offset the shortage of cooking oils Canada is ramping up canola production, increasing crushing capacity to turn raw canola seeds into canola oil, however, Smyth doesn’t expect that will change cooking oil prices until sometime after the summer.

“We’re seeing 51-52 dollars per 16-litre jug, and that’s like I said about a 300 per cent increase, and so it’s a huge challenge for us, its pinching margins and making it very hard for us to be profitable right now,” explained David Mackay, director of operations for Little Bones Wings Inc.

Mackay says he never imagined cooking oil prices would shoot up as they have in the last 2.5 years, forcing him to increase his menu prices 3 times.

Attempting to stop that from happing a 4th time, Mackay is working to create an alliance of restaurants that can purchase large volumes of cooking oil at once, with the hope that buying in bulk could provide cost savings for everyone involved.

“Almost a buying group if you will, so buy in bulk, buy at pallet level supply levels and pricing, even beyond, start look at contract pricing commitments, 6 months a year,” said Mackey.

As for Rembrran, he says most of his customers have been understanding about the price increases, and overall people are excited to be out again eating at restaurants.

“Hopefully that excitement can withstand these crazy prices possibly lasting long term, but fingers cross they don’t.”