Let me please explain my personal opinion, as an expert and after talking to CEOs from different production countries, to share what I see happening in the olive oil market and its prices.
I wonder if the three big global olive oil companies don’t fix prices to make more profit.
Some figures indicate that prices should not be going up the market:
- Packers kept their stocks in late May to 200,036 tones.
— Mills have 776,380 stored tons.
— Outlets moving in the middle had 130,000 tons.
— The total stock was 1,016,000 tons.
According to these figures, prices should have remained lower in these weeks of June and the beginning of July because, even though the outputs are good, stocks are high, and the packers have enough stock for the next two months. But the market has reacted in a very differently way. Sometimes I wonder if the three big global olive oil companies don’t fix prices to make more profit.
Now here are the reasons, as I see it, that have erupted with force to cause the rise is prices.
- Futures have shown a clear upward trend over the coming months and the beginning of the campaign.
— Industrial Packers have chosen to cover a longer term.
— Italians, still buying heavily in our market, are paying above domestic prices.
— Speculation has also entered the game and are carrying out numerous acts of resale, to raise cash and profits at current prices.
And, especially, industrial and cooperative mills have closed in band and are not willing to sell because they made some cash in the last weeks and they feel they can wait before selling and increase market prices. This is very common to see every year.
Finally, the industry is catching on to the fact that next season will not be so good because the weather conditions have affected flowering and olives also shows signs of exhaustion after the record for the current season.
Still, I estimate next year’s production to be between 1.1 and 1.2 million MT for Spain (even if cooperatives are saying under 1 million — a tactic to increase prices for the summer time).
Meanwhile, time will tell. However, with over 1 million ton of stock in Spain, they will need to sell it at some point.
The author is the CEO of Cruzoliva, a Spanish supplier of bulk olive oils. Do you have an opinion you’d like to share in an article? See our submission form and guidelines here.
Related Articles
Apr. 9, 2024
Discovery of Adulterated Olive Oil Kindles Debate Over Testing in Northern Cyprus
High olive oil prices and an import ban by the de facto state have created fertile ground for unscrupulous actor’s in the local market.
Feb. 13, 2024
Local Mils in France Are All the Rage
An ample harvest and high prices have led to a surge in activity and investments in community mills.
Dec. 21, 2023
Climate Extremes, Economic Pressures Dampen 2023 Harvest, Survey Finds
Olive oil producers gave the 2023 harvest a dismal rating in terms of yields and quality.
Feb. 23, 2024
After Bumper Harvests, a Sharply Lower Yield in Argentina
An ‘off-year’ harvest, lack of chill hours, and extreme weather events are expected to reduce the yield by as much as 40 percent.
Jun. 25, 2024
Bank of Spain Attributes Ongoing Inflation to Soaring Olive Oil Prices
The bank’s statements come as the government announced plans to continue its Value-Added Tax markdown on most foods, including olive oil.
Feb. 19, 2024
A Dismal Harvest Concludes in Greece
With the country’s olive oil production almost halved compared to last year, record prices at origin have shaped a market searching for equilibrium.
Nov. 27, 2023
High Olive Oil Prices in Spain Spur Interest in Black Friday Discounts
While prices at origin have dipped slightly, they remain elevated in stores, prompting concern among retailers over theft and consumers over fraud.
Jan. 2, 2024
Extra Virgin Olive Oil Sales in Spain Fell by 40 Percent in 2023
The soaring retail price for extra virgin olive oil has driven the vital ingredient out of the reach of many families.