EFKO terminal shutdown sends vegetable fat prices sharply higher in Russia

Prices for palm oil-based raw materials in Russia have risen by 43–57% over the past three weeks, while milk fat substitutes have increased by 50–60%. Market participants cite supply disruptions following the shutdown of EFKO’s terminal at the Port of Taman, which was damaged in a drone attack in late July, as one of the key reasons for the surge.

Palm oil is currently priced at around RUB 200–220/kg, compared with approximately RUB 140/kg three weeks ago. Higher logistics costs, global market prices and exchange-rate movements are also contributing to the increase. Industry participants, however, are not yet describing the situation as a physical shortage, with lower inventories and delays in new shipments seen as the main problems.

EFKO’s Taman terminal suspended vegetable oil handling operations in early August to assess the damage and carry out repairs. Its annual handling capacity was estimated at around 1.5 mln tons of products, including vegetable and tropical oils, molasses and sunflower meal. A full resumption of operations has not yet been announced.

Importers are attempting to redirect cargoes through northwestern ports, primarily St. Petersburg. However, the ability to quickly replace Taman’s capacity is limited, as Baltic logistics are largely geared toward container shipments. This is increasing delivery times and keeping raw material prices elevated.

If the logistics disruptions are resolved within one or two months, significant long-term consequences for the market may be avoided. If they persist, manufacturers could increasingly switch from palm oil and milk fat substitutes to butter and cream, potentially boosting demand for dairy raw materials and supporting prices in related segments.

Tags: Russia, palm oil, fats, vegetable fats