Spanish Officials Raise Alarm Over Rising Olive Oil Prices While Calling for Calm

Officials from the Spanish Ministry of Agriculture, Fisheries and Food have raised the alarm over ris­ing olive oil prices, a trend that is turn­ing a major sta­ple in most Spanish house­holds into a gourmet prod­uct.

At the time of writ­ing, extra vir­gin olive oil prices at ori­gin reached a new record high of €8.300 per kilo­gram, 115 per­cent higher than at the same time last year. Virgin olive oil and lam­pante have also dwarfed last year’s prices, hit­ting all-time highs of €7.638 and €7.313 per kilo­gram, respec­tively.

According to local media and var­i­ous offi­cials, the high prices at ori­gin have trans­lated into olive oil sell­ing for €10 per liter or more on super­mar­ket shelves.

“Anything below that fig­ure would be a loss,” César Lumbares, the direc­tor of the agri­cul­tural news pub­li­ca­tion Agropopular, wrote in an edi­to­r­ial. ​“The real­ity is very sim­ple: olive oil goes up in price, fun­da­men­tally, because there is, and will be, very lit­tle, and it is scarce.”

Whether rain falls across the country’s olive groves between now and November will impact how high prices rise. Analysts expect prices to con­tinue to rise through next year.

As a result of lower pro­duc­tion, domes­tic sales have declined. Olive oil sales decreased by 20 per­cent in the first six months of 2023, reach­ing nearly 126 mil­lion liters, accord­ing to the National Association of Edible Oil Bottlers and Refiners Industrialists (Anierac).

In total, 307 mil­lion liters of oil were put on the mar­ket, about 9 per­cent less than in the first half of 2022. Since the cur­rent crop year began in October, Anierac mem­bers have put 15 per­cent less olive oil on the mar­ket, about 200 mil­lion liters.

However, experts believe that the demand for olive oil remains the same, with many con­sumers decid­ing to use less olive oil instead of com­pletely switch­ing to another edi­ble oil.

Additionally, poor har­vests across the west­ern Mediterranean mean Spain increas­ingly ful­fills demand from mar­kets abroad, plac­ing addi­tional pres­sure on domes­tic prices.

Juan Vilar, a strate­gic con­sul­tant for the sec­tor, told Olive Oil Times in a May 2023 inter­view that con­sumers in Canada, Germany, Brazil, the United States and other wealthy coun­tries would ​“con­tinue to con­sume olive oil because they are used to pay­ing €10 [or more] at the super­mar­ket with­out any prob­lem.”

While inter­na­tional sales vol­umes are on pace to reach their low­est total in recent years, Spanish exporters con­tinue seek­ing new mar­kets.

In June, the Andalusian Committee of Organic Agriculture (CAAE), Spain’s old­est organic cer­ti­fi­ca­tion body, signed a deal with its Chinese coun­ter­part to increase Spanish organic exports to the world’s sec­ond-largest econ­omy.

In the same month, Extenda, the Andalusian government’s office of exports and for­eign invest­ment, orga­nized a series of meet­ings in Delhi and Mumbai to pro­mote Spanish olive oil in India, rep­re­sent­ing a mar­ket oppor­tu­nity of 300 mil­lion poten­tial con­sumers.

Currently, India is the fourth Asian des­ti­na­tion for Spanish olive oil. In the first quar­ter of 2023, India’s imports of olive oil from the Andalusia region of Spain alone was €9.9 mil­lion, up 31 per­cent from the same period last year.

Several recent trade del­e­ga­tions from Andalusia to Japan have also sought to pro­mote the rep­u­ta­tion of Spanish olive oil in the world’s third-largest econ­omy.

Back in Spain, Luis Planas, the act­ing min­is­ter of agri­cul­ture, fish­eries and food, told an infor­mal meet­ing of Community Agriculture Ministers in Córdoba that the high price of extra vir­gin olive oil must be faced with ​“real­ism and not hys­te­ria” since it is of a crop with alter­nat­ing har­vest vol­umes and trusts in the rains.

“The good news is that we have man­aged to con­tinue sup­ply­ing the national and inter­na­tional mar­kets, and if it rains in the com­ing weeks, it would be excel­lent news for the next cam­paign,” he added. ​“Olive oil is present and must con­tinue to be present in the diet of Spanish fam­i­lies.”

In the short term, dwin­dling olive oil stocks will con­tinue to pres­sure prices. The lat­est mar­ket data pub­lished by Spain’s Ministry of Agriculture, Fisheries and Food show that olive oil stocks fell to 383,000 tons at the end of July.

By com­par­i­son, stocks at the end of July 2022 sat at 698,000 tons, finally arriv­ing at 454,600 tons in September 2022, the last month of the 2021/22 crop year.

Some observers have even said Spain could run out of olive oil by October based on the cur­rent con­sump­tion rate.

“The real­ity is that there is very lit­tle olive oil stored and that the pro­duc­tion fore­casts for the next cam­paign, which will begin in a month, are bad,” Lumbares wrote.

Imports can help make up for some of the short­falls. In April 2023, Spain’s olive oil exports accounted for up to €17.9 mil­lion, and imports accounted for up to €19.7 mil­lion, result­ing in a neg­a­tive trade bal­ance of €1.79 mil­lion. Imports increased by 2.22 per­cent com­pared to the same period last year.

According to data from Spain’s agri­cul­ture min­istry, imports reached 168,900 tons in the first 10 months of the 2022/23 crop year, already 6 per­cent above the aver­age of the pre­vi­ous four crop years.

• El Mundo
• AgroCLM