Spanish Olive Oil Prices Increase for First Time in Three Months

After a precipitous fall, olive oil prices have crept back up in Spain. However, producers are divided on whether this trend will continue.

Jun. 11, 2018
By Daniel Dawson

Recent News

Olive oil prices in Spain have slightly increased after falling more than 30 per­cent in the last three months.

I expect prices to keep ris­ing because every day that passes con­firms that the next cam­paign will not be excep­tional.- Cristóbal Cano, UPA Jaén

Prices for vir­gin, extra vir­gin and lam­pante hit their low­est point last week before ris­ing by an aver­age of about €0.30 ($0.35) per kilo­gram. According to the International Olive Council, Spanish extra vir­gin olive oil was sell­ing at €2.61 ($3.07) per kilo­gram and refined olive oils were sell­ing at €2.20 ($2.59) before the price bump.

Some in the olive oil sec­tor believe that the prices are ris­ing because sales increased in May. The exact num­bers will be released later this month. May is gen­er­ally a good month for olive oil sales in Spain and sum­mer months gen­er­ally have higher sales as well.

This sit­u­a­tion con­firms what we have been stat­ing in this period of time,” Cristóbal Cano told Olive Oil Times. Cano is the sec­re­tary gen­eral of UPA Jaén, an orga­ni­za­tion that lob­bies for fair prices for agri­cul­tural com­modi­ties, and believes that there was no rea­son for the prices to be so low in the first place, which is why he expects them to rebound.

It was an unreal sit­u­a­tion and with­out any objec­tive data that jus­ti­fied that drop in the price,” he said. The mar­ket was prac­ti­cally dead and domes­tic sales were low since the buy­ers had gone to third-party coun­tries for their acqui­si­tions.”

Advertisement

Spanish olive oil dis­trib­u­tors have recently been refresh­ing their stock­piles by pur­chas­ing excess oil pro­duced in Italy and Greece. However, both coun­tries are expected to expe­ri­ence decreased pro­duc­tion com­pared with last year, accord­ing to fore­casts seen by Cano. He said Spanish olive oil pro­duc­ers are set to fill that void.

Now [those buy­ers will] have to focus on the province of Jaén,” he said. “[This should] increase both the demand and, we hope con­se­quently, price.”

Cano does not expect Spain to have an excep­tion­ally good har­vest this year, but he said this will be a com­mon theme among north­ern hemi­sphere pro­duc­ers. Meanwhile, demand for olive oil is expected to keep grow­ing and there­fore, the price should as well.

Yes, I expect prices to keep ris­ing because every day that passes con­firms that the next cam­paign will not be excep­tional, but it will be very sim­i­lar to world­wide har­vests,” he said.

Rafael Pico Lapuente is the direc­tor of Asoliva, an asso­ci­a­tion of indus­trial pack­ers and Spanish exporters of olive oil. He agrees that sup­ply and demand influ­ence the prices of olive oil, but he thinks prices might decrease again.

In my opin­ion, the prices will go down some­what, but I do not think much,” he told Olive Oil Times. We will have to wait to know the pro­duc­tions of other coun­tries, and every­thing points to that they will be lower than last year.”

The decrease that Pico Lapuente pre­dicts might take place due to a lack of activ­ity on the inter­na­tional olive oil mar­ket, which has seen bench­mark weekly pro­ducer prices in Spain, Italy, Greece and Tunisia decrease or remain steady through­out the spring, accord­ing to the IOC. Ultimately, Pico Lapuente admit­ted that he does not know what will hap­pen.

If I knew how they are going to change, surely I would live much bet­ter,” he said. That being said, the fact that prices have risen a bit is not sig­nif­i­cant because the mar­ket was very sta­tion­ary.”

At a meet­ing late last month in Mengíbar, Jaén, hun­dreds of mem­bers from all chap­ters of the Association of Young Farmers (ASAJA) gath­ered to dis­cuss the price decreases (which hap­pened a few days before the slight increase). The group’s pres­i­dent, Cristóbal Gallego Martínez, had a sim­i­lar mes­sage to that of Cano, say­ing that he could not under­stand why prices con­tin­ued to decrease in spite of sev­eral pos­i­tive indi­ca­tors.

According to the data we han­dle, the greater cur­rent prod­uct avail­abil­ity in Spain, com­pared to our com­peti­tors, will change the dynam­ics of the mar­ket between now and the end of the cam­paign,” he told the gath­er­ing. And while imports will decrease, the exports will rebound.”

In spite of his frus­tra­tion, Gallego Martínez was opti­mistic about the future. He pointed out that the unusu­ally wet spring brought much-needed relief to drought-rid­den south­ern Spain, which led the Ministry of Agriculture to revise their pro­duc­tion esti­mates for the 2018/19 cam­paign.

“[This data] shows that there are no objec­tive rea­sons for the cur­rent price lev­els to be occur­ring,” he said.

However, a spokesper­son from the ASAJA Jaén chap­ter told Olive Oil Times that the orga­ni­za­tion would not make any pre­dic­tions on whether or not the prices would con­tinue to go up until they received the most recent sales fig­ures.





Related News