2023-08-26 02:50:49
The price of olive oil continues to rise, it has become more expensive by 5% between the months of June and July and accumulates a rise of 38.8% in the last year, according to the Consumer Price Index (CPI), a a situation that will continue as long as it does not rain, indicate sources in the sector. The lack of water reduced the production of last season to around 660,000 tons, less than half that of the previous one, and for what the olive growers expect it to be just as low or even less if it does not rain in autumn, for so if the product is scarce, prices will continue to rise.
It is, therefore, a “cyclical” situation that will be overcome when the rains return to favor high production, says the person in charge of oil from the agricultural organization COAG, Juan Luis Ávila. However, the person in charge of the oil sector of Cooperativas Agro-alimentarias de España, Rafael Sánchez de Puerta, shows his concern about what is going to happen in the future and indicates that if “this situation of drought is here to stay” we must consider “a water policy that increases the irrigated area in the olive grove”.
The average price of extra virgin olive oil has reached record levels of up to 9.40 euros per liter, while the original price at observatories such as Infooliva is 7.9 euros per kilo, the highest on record. A year ago it was around 3.5 euros and in 2020 it cost about 2 euros.
On the shelves, the price is so high that Sánchez de Puerta does not consider that it can increase much more, although he warns that it will depend a lot on how sales evolve.
30-35 liters per family per year
Ávila, for his part, considers that, although the current price “is unprecedented, it is being given an importance that it does not have.” The COAG representative explains that olive oil is a product that is consumed in small quantities, at an average of 30 or 35 liters per year per family, and that the price rise barely means “20 or 30 cents more per day in The shopping cart”. “We are used to paying a bargain price for a high-quality product that we use in small quantities and now we are giving too much importance in an exceptional situation that as soon as it rains it will end,” emphasizes Ávila.
For now, olive oil shipments have decreased by 20% in the first six months of 2023, standing at 125.7 million liters, according to data from the National Association of Edible Oil Bottlers and Refiners (Anierac). This fall in demand has not led to an adjustment in prices in this way and, in fact, in origin the marketing continues to be “good”, in the opinion of the person in charge of the UPA olive grove, Cristóbal Cano. However, the monthly average of outputs, between the national market and the export market, has decreased by 36% compared to last season, up to 90,500 tons, according to data from the Food Information and Control Agency (AICA).
The rest of the edible oils have decreased in price by 20.3% in the first half of 2023, according to the CPI, and their sales have increased by 1.17% in this period compared to the first half of last year, up to 173 million liters, according to Anierac.
This panorama worries Ávila, who indicates that “a product that is at the base of the Mediterranean diet, such as olive oil, cannot be lost due to a temporary rise that affects 20 cents a day.”
The representatives of the sector agree that despite the fact that prices are higher, farmers are not benefiting at all, since with so little harvest they cannot compensate for the high costs they pay to produce. “We have always claimed, and more now in a price scenario like the one we have, the application of the law of the food chain and a price and commercial margin observatory that recognizes the work of each of the links in the chain” says Cano. The representative of UPA adds that in the current situation of drought the Government should have granted specific aid for the olive grove, something that it has not done.
The current price of extra virgin olive oil, above 9 euros per liter, “does not benefit consumers or farmers, because it does not directly affect their income statement as they do not have a significant harvest to be able to sell” Cano points out. In his opinion, the sector remains in crisis, “due to the fact that olive growers see how their losses continue to increase with the high production costs and, above all, with this drastic reduction in the harvest as we head towards a very bad second season, in addition to consecutively after the disaster of last season 2022/23 ». Efe
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