The last months of 2015 are taking a toll on Spain’s olive oil prices.
The farm gate price of virgin olive oil has dropped 22 percent, from a high near €4 per kilo, to €3.00. Extra virgin prices have gone done 6.25 percent over just the last week alone.
There doesn’t appear to be any concrete explanation for this either.
Last year saw a low-producing harvest, the supply is average, and the year to come doesn’t look terribly promising — all factors which would lend to a scarcity of stock now and for some time. Logically, this should cause prices to go up, but instead they continue to fall, and quite notably.
There is some speculation around what could be contributing to the spiral. For one, buyers and large distribution channels are anticipating further price drops and holding off on purchases.
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For example, buyers purchased 3,816 tons during the week of November 6 – 12. A week later transactions went down to 2,875 tons, a reduction of 24.7 percent. The result seems to be a tension in pricing and, as a consequence, a further drop.
Adding to the complexity is the fact that Spanish consumers have been buying less olive oil (likely compounded by previously high prices), and are purchasing more of the seed oils instead. Other factors include the anticipation of olive oil from the recent harvest, as well as a greater supply from Tunisia.
These price drops aren’t just happening in Spain, either, with both Italy and Greece seeing reductions in last weeks as well.
The Spanish market remains perplexed; the only clear take-away is that the seller needs to sell more than the buyer needs to buy.