Sask. restaurant group feeling the impact of rising cooking oil prices

A Saskatchewan restaurant group is experiencing sticker shock when ordering a critical ingredient – cooking oil.

“The biggest thing is you see massive jumps. It’s not like five per cent here and there. It’s, you know, 30 per cent, 40 per cent, 50 per cent at times. You’ll go there and two weeks later, it’s double the price almost,” said Dale Mackay, chef and co-owner of Grassroots Restaurant Group.

Mackay said the challenge is that cooking oil isn’t only used for frying, but also in mayonnaise, dressings and many other things they make at his restaurants in Saskatoon and Regina.

“It’s not just one area of your food costs is going up, it’s really everything is going up,” he told CTV News.

Sylvain Charlebois, Dalhousie University professor of food distribution and policy, said climate change, COVID-19 pandemic supply chain issues and Russia’s invasion of Ukraine have all hit the global food supply.

He said cooking oil is the latest target, with prices skyrocketing over the last eight months.

Charlebois said Indonesia’s move to start restricting exports of palm oil to secure its local supply is also contributing to the problem and could make the global food crisis worse.

“If you continue to see more countries hoard or apply protectionist measures, it’s just going to get worse, and that should keep a lot of Canadians up at night over the next several months,” he said.

“Trades are good for the global economy and trades are meant to keep food prices as low as possible. If you stop trades between nations, that’s when you’ll see food prices skyrocket, unfortunately.”

Indonesia accounts for 55 per cent of palm oil exports globally, while Ukraine is the largest exporter of sunflower oil in the world.

While cooking oil prices have already seen an increase at grocery stores, Charlebois said consumers will see the biggest jump when dining out.

“At home, you can basically decide not to buy vegetable oil at all and you’ll be fine, but if you go to the restaurant, it’s very likely they’ll have to adjust menu prices as a result,” he said.

Mackay said his restaurants aren’t raising their prices specifically because of cooking oil prices just yet, but that they are looking at ways to minimize their use of vegetable oil by using alternative products or baking things instead of frying them.

“We just got to be creative with what we’re doing and just be diligent and hope that, you know, we can still give the exact product that we want to give for the price that we want to charge,” he said.

“We’re just doing our best to manage what we can and we’ll see how long this goes on.”

Mackay said this comes at a time when restaurants are still trying to recover from the pandemic and get back to “normal” operations.

“We don’t want to have to put that cost on the consumer, but at the same time, our margins are so small that we need to obviously, you know, the numbers need to make sense, otherwise we’re just here creating a service and not a business,” Mackay said.

“So, we’re doing our best to keep it under control and find profits where we can find them.”

SASKATCHEWAN CANOLA

Charlebois said all eyes are on Canada for a “bumper crop” this year, but that poor weather could derail that.

“Let’s hope that this year, Mother Nature will cooperate, but nothing is certain really at this point. With canola, you need a lot of moisture and I’m not sure that we’re there in Saskatchewan and Alberta,” he said.

Todd Lewis, a farmer in Gray, Sask. and a past president of the Agricultural Producers Association of Saskatchewan (APAS), said farmers in the province are facing a “volatile situation” with the unpredictable weather, along with record prices for things like diesel, fertilizer and chemicals.

“We’ve got the opportunity to maybe produce one of the most valuable canola crops in history this spring and then, you know, this season. But at the same time, they definitely will be one of the highest risk crops that we’re putting in this year. So, it’s a real balancing act for farmers,” he said.

Lewis said the cooking oil shortage affecting people around the world is an opportunity for canola to take over.

“It’s an opportunity for Canadian producers and really the entire industry to step into some markets that we haven’t been into before,” he said.

“So, hopefully, we’re going to have a good crop available to take advantage of the opportunities that we’re going to see over the next few months.”