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FOOD & DRINK

Spain’s supermarkets ration sunflower oil over Ukraine war

Spanish supermarkets began rationing the sale of sunflower oil on Tuesday to stop customers stockpiling over shortage fears due to Russia's invasion of key supplier Ukraine.

Spain's supermarkets ration sunflower oil over Ukraine war
Mercadona, Spain's largest supermarket chain, IS also limiting purchases to five litres per customer, it said on its website. (Photo by YURI CORTEZ / AFP)

“Owing to the situation in Ukraine, there are some problems with the supply of sunflower oil. For this reason, purchases are limited to three one-litre bottles or one five-litre bottle per customer per day. Our apologies,” said a sign in the window of various Madrid supermarkets owned by El Corte Inglés.

Mercadona, Spain’s largest supermarket chain, was also limiting purchases to five litres per customer, it said on its website.

Such limits were introduced as a result of “unusual customer behaviour” with some rushing to purchase sunflower oil which had created an “abnormal” level of demand, said ASEDAS, which represents Spanish supermarkets and food distributors.

Some customers were seeking to stock up ahead of possible shortages given that Ukraine supplies half of the world’s sunflower oil, or 14 percent of global vegetable oil supplies, analysts say.

Battling a massive Russian invasion which began on February 24, Ukraine on Sunday introduced a string of export restrictions, meaning a license is now required by the authorities for the export of certain agricultural products, including sunflower oil.

“For now, there is no problem with shortages,” said Primitivo Fernández, head of Anierac, the association representing Spain’s edible oil industry.

But if the conflict continued, “it is likely there could be some problems getting hold of oils that originate from the whole Black Sea area, not only Ukraine,” he told AFP.

Famous for its far-reaching sunflower fields, Ukraine is the world’s top producer of both oilseeds and sunflower oil.

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PROPERTY

What the Euribor rise means for property buyers and owners in Spain

The rise in the Euribor interest rate, used to calculate mortgage payments in Spain, is causing big changes in the mortgage rates.

What the Euribor rise means for property buyers and owners in Spain

Looking to buy property in Spain? Already a homeowner here? Well, you may have heard something about rising interest rates recently.

Or perhaps changes to the terms of your mortgage. Or the Euribor – but what is it, and what’s going on?

What is Euribor?

In Spain, Euribor is the interest rate most often used to work out mortgage payments and to calculate both variable and fixed rates.

It is anchored to the interest rate set by the European Central Bank, and, as we are now seeing, quite responsive to global economic events.

It’s the interest rate that banks in the Euro Zone use to lend to each other, so when the base rate goes up, the Euribor does too, which sends mortgage interest rates across the Eurozone rising. 

Rising rates

Most Spanish mortgages with variable rates normally vary based on a variety of factors, but this number has been rising and in May 2022 saw figures of 0.240 percent (Tuesday May 17th), well above the average. 

The rises throughout May are leading many in Spain, and indeed across Europe, to wonder how high their mortgage rates can go, and when the rises will stop.

Banco de España has estimated that the increases could range from anything between €35 a month to an additional €400. Bankinter predicts the Euribor rate will finish the year at a staggering 0.40 percent, but, more encouragingly, Caixabank’s prediction puts it at just 0.13 percent by the end of 2022.

On Euribor.com.es, a website that tracks the index on a daily basis, they suggest that the market consensus predicts the Euribor will finish at around 0.3 percent at the end of the year, but could reach as high 0.8 percent in 2023.

All of them agree, and most other economic indicators suggest, that whatever the figure at the end of the year, it will remain positive, so it seems almost certain that mortgages will continue to rise throughout 2022 at the very least.

This instability, in addition to global inflation and supply chain problems, could mean that mortgage rates will be affected at least until 2023, with some predictors even signposting 2024 as the possible end of a rise in mortgage prices.

With things uncertain in the mortgage industry, and the world economy more broadly, perhaps you’re thinking of ways to try and insulate yourself from the climbing interest rates.

How to protect yourself from the rising rates

One way to weather the storm of interest rate increases is to change your mortgage from a variable to a fixed rate, either by negotiating with the your bank or by changing bank altogether – a process known as subrogation.

According to data from MyInvestor, during March and April the number of subrogations has started to rise.

Subrogation basically means switching the mortgage from one bank to another to change its interest rate. Although it does involve certain charges in order to do so – you pay the valuation of your house, which normally costs a few hundred euros, and a fee charged to the bank you are leaving, which can cost up to 2 percent of the outstanding amount – it could, and probably would, work out cheaper than paying the hiked interests rates over time.

You could also try and take out a new mortgage with another bank and use the borrowed money to settle the loan. This is, of course, a more expensive option as you have to pay the appraisal, the commission for early repayment of the current credit (again, up to 2 percent of the outstanding amount) and the expenses associated with its cancellation of registration, which normally runs to around €1,000.

READ ALSO: Spanish mortgages – Ten things foreigners should know before getting one

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