`After Big Gains, Spanish Olive Oil Prices Begin Year Steady - Olive Oil Times
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After Big Gains, Spanish Olive Oil Prices Begin Year Steady

By Ephantus Mukundi
Jan. 17, 2022 12:35 UTC

Officials in Spain antic­i­pate olive oil prices to remain steady after ris­ing rapidly in the first half of 2021.

Despite prices remain­ing steady for the past seven months, there are fears that drought in south­ern Spain and ris­ing pro­duc­tion costs could dampen these gains.

According to data from Poolred, the price infor­ma­tion sys­tem for olive oil at ori­gin, the aver­age price of extra vir­gin olive oil in the last week was €3.30 per liter, while vir­gin olive oil was €3.10 and lam­pante at €2.90.

See Also:Higher Prices Blamed for Drop in Spanish Exports

By com­par­i­son, the prices for the same olive oil grades in January 2021 sat at €2.50 per liter, €2.07 and €1.94, respec­tively.

However, Teresa Pérez, the man­ager of the Interprofessional Organization of Spanish Olive Oil, said that the increase in prices from one year to the next should be treated with cau­tious opti­mism.

She added that it is impor­tant for prices to reach a point at which they cover the cost of pro­duc­tion with sig­nif­i­cant enough profit mar­gins for the sec­tor to sur­vive.

According to the Ministry of Agriculture, Fisheries and Food, Spain pro­duced 1.6 mil­lion tons at the close of the 2020/21 crop year, nearly match­ing the record-high yields of 2018/19.

A shorter har­vest­ing sea­son is expected in the cur­rent crop year with pro­duc­tion esti­mated to reach 1.3 mil­lion tons with many pro­duc­ers opti­mistic about the high lev­els of qual­ity from the early-har­vested oils, Pérez said.

Rafael Sánchez de Puerta, the pres­i­dent of the oil sec­tor of Cooperativas Agro-ali­men­tary, insisted that the increase in prices expe­ri­enced this year is accom­pa­nied by a rise in con­sump­tion in almost all coun­tries.

According to the deputy direc­tor of the International Olive Council (IOC), Jaime Lillo, there is a lot of room for growth as olive oil rep­re­sents just two per­cent of the con­sump­tion of veg­etable oils glob­ally.

“There is a shift in con­sump­tion from tra­di­tional coun­tries such as Europe or the Mediterranean basin to new con­sumers such as the United States, Japan, Brazil, Australia or China,” he said.

However, there are con­cerns about pro­duc­tion costs, such as labor, energy and fer­til­iz­ers, all of which are affect­ing prof­itabil­ity. In addi­tion, extreme weather events are a con­stant threat to the sec­tor.

“What is becom­ing alarm­ing is the drought sit­u­a­tion in pro­duc­ing areas such as Andalusia due to the loss of olives,” Sánchez de Puerta said. ​“We are over­whelmed by the next sea­son because, with the lit­tle that has rained in autumn and win­ter, the olive grove is fail­ing very badly.”

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