Production Shortfall Expected to Send Olive Oil Prices Higher in Spain
Spain’s olive oil output this season may fall 200,000 tons short of its combined domestic and foreign demand, causing prices to rise until consumers stop buying, a major Spanish olive oil organization says.
Infaoliva, the Spanish Federation of Olive Oil Industries and Producers, made the prediction on Friday at the launch of its olive oil price observatory in Jaén, the world capital of olive oil production. The president of the Jaén division of Infaoliva, Manuel Alfonso Torres, said just how high prices go will be decided by consumers. Prices will rise until the client stops buying, he said.
Demand to exceed supply
Infaoliva secretary general Enrique Delgado told Olive Oil Times the shortfall will arise because the leftover stocks of 690,000 tons from 2011/12 plus expected production of just over 625,300 tons in 2012/13 totals about 1.31 million tons.
That’s already about 140,000 tons less than Spain’s total domestic and foreign olive oil sales of 1.45 million tons in 2011/12 before taking into account that growth is expected to continue in both, he said.
“And to that we should add that the International Olive Council has forecast that output will be down 19 percent worldwide this season, and that was based on an estimated 900,000 tons for Spain.”
Torres said the new price observatory would provide producers with daily updates on ex-mill prices in Jaén.
Sales agents in the province will provide the data early each morning but it won’t be published until 11:00 AM so as not to influence the market, he said.
Producer prices up
Spain’s olive oil price information system POOLred shows an average weighted price today of nearly €2.41/kg for olive oil, up from €1.87per kg on July 26.
This article was last updated November 22, 2014 - 5:07 PM (GMT-5)