`Production Shortfall Tipped to Inflate Prices in Spain

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Production Shortfall Expected to Send Olive Oil Prices Higher in Spain

Nov. 25, 2012
Julie Butler

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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.

Enrique Del­gado

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.”

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Price watch

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.



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