Olive oil prices are rising in all major markets, a trend that is expected to continue in the coming months.
According to the latest data released by the agricultural market observatory of the European Union, Spanish extra virgin olive oil prices have risen by 4 percent in the last month, a 15-percent increase compared to September 2021.
Other relevant markets, such as Italy and Greece, have also experienced a 2 percent rise in the last 30 days, with Greek extra virgin olive oil prices rising 12 percent in the previous 12 months.See Also:Olive Oil Business News
The E.U. agricultural observatory has also reported significant increases in virgin and non-virgin olive oil prices in all major E.U. markets. For example, in Greece, the price of virgin olive oils rose 59 percent in the past year.
The increase in virgin and non-virgin olive oil prices had been widely predicted, given the turmoil in the vegetable oils market caused by the Russian invasion of Ukraine and the low expectations for the 2022/23 crop year in the main producing countries.
A few weeks ago, the Spanish Minister of Agriculture Fisheries and Food Luis Planas warned that olive oil yields for the incoming season would be significantly lower than average. He also estimated vegetable oil prices would remain high.
Given the effects of the drought and quickly rising production costs in Spain and Italy, the two largest producing countries in the world, extra virgin and virgin olive oil price hikes are seen as bad news for bottlers.
On top of climatic and economic problems facing Spain, some of the country’s largest producers warned of a significant reduction in extra virgin olive oil consumption following the end of emergency measures enacted to curb the spread of the Covid-19 pandemic, which led to a significant increase in household consumption in the past two years.
According to E.U. data, European olive oil stocks are estimated to reach 661,000 tons by the end of September, slightly above the average of the last five years. The increase in ending stock is primarily attributed to the abundant yields of the 2021/22 crop year.
These ending stocks are expected to sustain E.U. olive oil exports, which reached almost 500,000 tons of extra virgin olive oil and 200,000 tons of virgin olive oil in the current crop year.
According to Food Ingredients First, one of the leading exporters of Spanish olive oil, Acesur, expects global olive oil demand to grow amid the sunflower oil shortage. As a result, the company expects olive oil prices to rise by 20 or 25 percent in the next few months.
Kyle Holland, an analyst at Mintec, told The Wall Street Journal that production decreases in Spain could lead to olive oil prices rising to €4.30 per kilogram.
Olive oil prices are also expected to increase outside of Europe’s major producing countries. Lordan Ljubenkov, the president of the Cooperative Association of Dalmatia, told local media that prices in Croatia are likely to rise by 20 to 30 percent in the coming month.
“Croatian olive producers will not see their actual work become more expensive, but the packaging will cost more, as will fuel, transport and the means of protecting the olives themselves,” he said.
“Everything about olive oil and the efforts put into the process by Croatian olive growers will become more expensive, and at the same time, the final product, extra virgin olive oil, will also cost more,” Ljubenkov added.
Outside of the European Union, officials in Tunisia and Morocco told local media that they are expecting to see their olive oil prices rise. In addition, producers in Chile and California have told Olive Oil Times they also have increased their prices to cope with inflation.