Olive Oil Prices Hit Record Highs in Spain After 'Unprecedented' Market Events

Prices for all grades of olive oil shot up after the Spanish and Andalusian governments released official harvest estimates well below initial expectations.

Oct. 13, 2022
By Daniel Dawson

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Despite built-in expec­ta­tions of a dis­as­trous har­vest, few in Spain were pre­pared for olive oil prices to reach record highs last week.

We are liv­ing in a moment that is com­pletely unprece­dented,” Juan Vilar, a strate­gic con­sul­tant, told Olive Oil Times. Olive oil has never had such a high price.”

If it does not rain, it would be impos­si­ble to pre­dict how far the prices will rise.- Juan Vilar, strate­gic con­sul­tant

According to Poolred, an olive oil price data­base run by the Andalusian gov­ern­ment, extra vir­gin olive oil is cur­rently sell­ing for €4,397 per 100 tons, vir­gin olive oil is priced at €4,261 per 100 tons and lam­pante olive oil is sell­ing for €4,005 per 100 tons.

Álvaro Olavarría, man­ager of Oleoestepa, a coop­er­a­tive, told Agropopular that olive oil prices at ori­gin rose between 25 and 47 per­cent com­pared to this time last year.

See Also:Olive Oil Prices Rising Worldwide

Last week, both the Andalusian gov­ern­ment and the Spanish gov­ern­ment made an offi­cial har­vest fore­cast,” Vilar said. Their offi­cial har­vest fore­casts are some­what lower than what was thought would hap­pen.”

Spain’s agri­cul­ture min­istry said it antic­i­pated pro­duc­tion to be a bit less than 800,000 tons. Andalusia’s agri­cul­ture min­istry said it expected a bit more than 700,000 tons.

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For his part, Vilar thinks Spain’s final pro­duc­tion fig­ures will fall some­where between 900,000 and 1 mil­lion tons.

The offi­cial read­ing made by the two min­istries has pro­duced a price increase,” Vilar said, describ­ing this as an unprece­dented moment for the Spanish olive oil mar­ket.

Normally, prices are tied to the Spanish har­vest since the coun­try is the world’s largest olive oil pro­ducer by a sig­nif­i­cant mar­gin, account­ing for roughly half of the global yield in any given year.

When there is low pro­duc­tion in Spain, prices are high and when there is a lot of pro­duc­tion in Spain, prices fall,” Vilar said. This is some­thing that has been repeated for the last 40 years.”

However, this year’s har­vest, which could be the worst of the past decade, has coin­cided with sig­nif­i­cant declines in other large pro­duc­ers, includ­ing Italy, Morocco, Portugal and Tunisia.

At first, when unof­fi­cial pro­duc­tion esti­mates were 1 mil­lion tons, Spanish millers and bot­tlers spec­u­lated that this year’s yield, com­bined with left­over stocks from last year, would just about cover demand at home and from abroad.

Demand remains more or less sta­ble,” Vilar said. So now, there is not enough sup­ply to cover all the demand dur­ing the com­ing year.”

These unprece­dented price increases come months after olive oil prices expe­ri­enced a sep­a­rate but equally unchar­ac­ter­is­tic 15 per­cent increase caused by the Russian inva­sion of Ukraine.

The two coun­tries are among the largest sun­flower oil exporters. The com­bi­na­tion of Western sanc­tions on Russia and the severe dam­age done to Ukraine’s sun­flower har­vest caused some Spanish restau­rants and con­sumers to swap sun­flower oil for olive oil.

Still, Olavarría urged con­sumers not to stop buy­ing olive oil. He said the aver­age con­sumer would only pay €5 more per per­son in 2022 com­pared to 2021.

However, Vilar said if no rain comes before the har­vest gets under­way in the com­ing weeks, prices at ori­gin will keep ris­ing. Last month, the European Commission warned the drought is likely to per­sist on the Iberian Peninsula until November.

There is no way for prices to stop ris­ing,” he con­cluded. If it does not rain, it would be impos­si­ble to pre­dict how far the prices will rise.”



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