Spanish olive oil producers claim that this year’s harvests are the worst they have seen and the demand for olive oil from consumers is much higher than what can be supplied. This demand for olive oil and lack of supply has caused the price of Spanish olive oil to rise dramatically.
According to the Spanish consumers’ group OCU, last year’s production was very low, with a yield of 800,000 metric tons of olive oil, compared to approximately 1.8 million the year before.
The poor harvests are linked to the Xylella fastidiosa outbreak in Europe. This bacteria kills infected plants by preventing water movement in trees, which ultimately leads to the decay of the tree. Not only is the Xylella fastidiosa bacteria depleting the olive crops, so is the ongoing drought in southern Europe.
Refined olive oil prices have increased 51 percent since May of 2014, jumping 20.7 percent since just May of this year. Meanwhile, extra virgin prices have surged, too, having risen 50.3 percent since October 2012, and 4.3 percent in the last month alone. – The Spanish consumers’ group OCU
While the other two major olive oil producers, Greece and Tunisia, have had good yield and production, it is not enough to compensate for Spain and Italy. With the increase in olive oil consumption all around the world and specifically Eastern Europe over the last few years, the supply cannot match the demand and analysts predict prices to remain high in the coming months. The average retail price of a liter of extra virgin olive oil has risen from £6.32 in December to £6.95 June, according to data from trade journal the Grocer.
Retailers and suppliers hold a lot of stock and contracts are signed for six months or a year, so volatility in the market can take a while to feed through to supermarket shelves. Retailers absorbed price rises earlier in the year because they were pegged by discounters but there has been absolutely no letup and we’re now in a crisis situation. – The Guardian
For Spaniards, whom olive oil a fundamental part of their daily diet, will surely adjust their consumption. According to the OCU, in similar situations in the past, Spanish consumers have simply replaced olive oil with cheaper alternatives. While in other parts the world we may see a decline in the purchasing of imported olive oils from Spain and Italy with an increase in either local, Tunisian or Greek.
Sources: http://www.oliveoiltimes.com/olive-oil-business/europe/spanish-olive-oil-prices-surge/49315
http://www.theguardian.com/environment/2015/jul/24/olive-oil-prices-surge-drought-disease-spain-italy
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