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Spain produced just half of its normal quantity of oil in the last harvest, according to the International Olive Council

Fears that Spain may run out of olive oil before the next harvest begins in October have been pushing prices to record levels.

Commodity prices have more than doubled in a year – the price of extra virgin olive oil from Andalusia has jumped up 114.1% from €3.83/kg to €8.20/kg in the 52 weeks to 16 August, according to Mintec figures.

Stock prices were up 19.4% in the past eight weeks alone as markets grow increasingly concerned with the Mediterranean’s ability to supply enough olive oil throughout the rest of the year.

Spain, the world’s largest share producer and exporter of olive oil, produced just half of its normal quantity of oil in the last harvest, according to the International Olive Council.

Many players in the market “are starting to worry that Spain is going to run out of supply before the new harvest”, said Mintec pricing analyst Kyle Holland.

There are also concerns that other supplying countries such as Greece, Italy and Portugal would produce less in the next harvest, contributing to availability woes.

Olive oil has been under pressure for months, with producers warning of shortages back in April this year.

This has led to consistent price increases at retail level – shelf-edge prices for olive oil have increased 40.6% in the past year across Asda, Morrisons, Sainsbury’s, Tesco and Waitrose, according to The Grocer analysis of Assosia data.

But suppliers warned these were set to rise further as commodity prices filtered through the supply chain and demand significantly outweighed supply.

“This is the highest olive oil has ever been traded at”, said Filippo Berio CEO Walter Zanre, adding he ”wouldn’t be surprised if we cracked the €10,000 per tonne barrier in next couple of months”.

The company has recently upped prices by 16%, its second increase this year. Zanre said he was concerned this would put off cash-strapped consumers.

Despite shelf-edge olive oil prices continuing to rise in the month to 16 August, up 2.6%, prices were still far from reflecting the raw material costs, he claimed.

“If prices were to reflect today’s costs, you’d be looking at another 30%-40% inflation to hit the supermarket shelves,” Zanre said.

He acknowledged the brand had “already become very expensive”, but that he didn’t ”see an opportunity between now and the end of the year to put prices up again, so we’ll have to batten down the hatches and tighten our belts”.

Filippo Berio is preparing for supply shortages by ruling out promotions in the last quarter of the year, Zanre said.

“It would be irresponsible - by conserving stocks by cutting promotions I think we can maintain availability.”