Retail prices for olive oil are tipped to rise as costs soar in the wake of concerns over upcoming crops.
Bottlers say they are typically paying from 20% to 40% more than in May, with reports that Spanish oil, in particular, is increasing in price daily.
Spain - a key supplier - is currently the main cause of concern for the industry. It is feared very hot weather during the olive trees’ flowering period this year will mean the 2014/15 crop could be as small as half the size of last year’s bumper crop.
“Above-average dry and warm weather throughout the Mediterranean olive-growing belt in May and June adversely affected olive trees during the blooming period,” said Mintec. “This is on top of the stress the record output seen in 2013/14 had put on the Spanish trees.”
Mintec said it was too early to assess what the full impact would be on the 2014/15 crop, adding the record 2013/14 crop was meeting demand.
But industry forecasts for the Spanish crop were pessimistic, said one supplier. “Currently it is very difficult to purchase wholesale bulk olive oil in Spain as producers are withholding stock in anticipation of higher prices later in the year.”
Italy is also facing crop problems in Puglia, the country’s largest olive oil production area, due to a bacterial infection, and suppliers worry this could affect the 2014/15 crop. And, though good harvests are forecast for Greece, Tunisia and turkey, some suppliers question whether these could make up for the Spanish shortfall.
“There will be probably be no respite to the current increasing price trend until the full flow of new season oil, which is expected to come on stream after the Christmas break,” said Filippo Berio MD Walter Zanré. “The extent of the increase in the wholesale cost of olive oil means it is almost inevitable that prices to shoppers will have to increase.”