Hosting thought leaders for insightful discussions that bring value to our network of FMCG industry buyers and suppliers is a regular activity at Wabel.
Our most recent exclusive webinar with Dr. Yvonne Pfeifer, Director of Digital & Innovations at Tentamus, and Arne Dubecke, Head of the Tentamus Center for Food Fraud, was no exception.
We invited these world-renowned experts in the product safety and quality industry for a webinar on the Russia-Ukraine war and its potential impact on food security. Because there’s no substitute for keeping up with the news; this is one story that impacts everyone.
In this blog post, we bring you a brief overview of what was covered in the webinar, including the influence of Ukraine and Russia in food supply chains around the world. For more detailed information, you can watch the full recording here.
Weight of Ukraine and Russia in global food supply chains
Since February 24, Russia has been waging war against Ukraine. The effects are being felt in global food supply chains. Companies are avoiding rail transport between Europe and China, which is exacerbated by China’s lockdown of Chinese and international rail and air traffic. Transportation routes and supply chains remain troubled and expensive, merchant shipping in the Black Sea is down, and ocean freight rates have skyrocketed, among other consequences, forcing the industry to turn to alternative sources of supply.
Some food is becoming scarce...
Ukraine is the “breadbasket” of Europe. Ukraine’s arable land accounts for about a quarter of the total arable land in the European Union. About 80 percent of the world’s sunflower oil exports come from Russia and Ukraine, according to the industry association Ovid®. By this fall, another product may be in short supply: Mustard. Nuts, herbs, frozen fruits and fruit juice concentrates could also become scarce. What that means in concrete terms is difficult to estimate at this point, says Dr Pfeifer. Price increases and shortages will keep us on our toes in 2022.
But what can this mean from a food safety perspective?
Consider the example of honey. Before the conflict, Ukraine was the largest honey producer in Europe (with more than 50% of production destined for export). Tentamus experts predict a price increase of about 20-30%, along with a reduction in supply. Risks concern authenticity and contaminants, in particular conflict contaminants such as heavy metals and biological contaminants. Shortage of raw materials using the example of sunflower oil: According to Tentamus forecasts, Sunflower oil will remain a scarce raw material for a longer period of time, and rapeseed oil from Europe or Canada is also an uncertain alternative due to the previous year’s poor harvest. Sunflower oil, margarine, mayonnaise, chips, French fries, pesto, antipasti, roasted nuts, processed cheese and ready-to-use sauces are just some products affected.
Potential impact on food safety and authenticity:
Due to the Ukraine crisis, production volumes and commodity flows are changing. This means that some foodstuff and raw materials will be more difficult to get hold of in the short term. And because there’s a high probability that the adulteration rate will increase, it’s especially important for retailers and importers to work with new suppliers with whom they haven’t done business before
With sunflower oil, changing supply chains carry the risk of adulteration with lower grades (refined oil, rancid oil), adulteration with foreign oils or inferior qualities of foreign oils (think Taiwan’s Gutter Oil Scandal 2014), and mycotoxins are all serious concerns that can come into play depending on the origin of the sunflower oil.
What to expect next?
The experts at Tentamus remind us that this crisis doesn’t only affect the large markets. Small ingredients and other smaller yet important markets can also be affected, for example, the coriander market for Germany (since more than half of its exports come from Russia and Ukraine). What should also be considered is that, even if we think that countries such as France or Germany have a huge global influence, they may not play a huge role in the world market, for example, sunflower oil.
It’s expected that adulteration will increase, mainly in the form of foreign materials, inferior quality or substitution. This will also increase the risk of contamination with allergens, mycotoxins, pesticides and other contaminants that directly affect food security.
If you want to learn more…
What are the obstacles to this year’s harvest? What are the risks associated with changing supply chains from an ingredient and country perspective? What are the future outlooks and solutions according to Tentamus experts?
You can view the entire recording on our sourcing platform Needl to hear the full thoughts of Dr. Yvonne Pfeifer and Arne Dubecke.
Our Needl platform enables you to request a 1-on-1 meeting with Tentamus and benefit from their expertise. It also gives you access to an extensive network of suppliers and buyers worldwide.