Olive oil suppliers have warned of further soaring prices as drought conditions in the Meditterranean cause plummeting forecasts.
They say retailers will have to increase prices by up to 30% later this year, on top of retail price rises of up to 20% earlier in the year. Supply-side prices will have increased by 60% since November last year as a result of the relatively poor crop in 2004/2005.
Suppliers fear that higher prices could hit consumer enthusiasm for a healthy product that now forms the largest sector in oils. Sales were up 6.5% to £106m in the year to September 3 [ACNielsen].
Spain has recorded its lowest rainfall since 1947 which has devastated agriculture. New season production in Spain is forecast at 700,000 tonnes, down from 990,000 tonnes, the lowest since 1995/6. World production is set to be 2,450,000 tonnes, compared with 3,174,000 tonnes in 2003/4.
Suppliers say production is set to be insufficient to meet demand, with a shortfall of 150,000 tonnes, including carryover.
Walter Zanré, country manager of Filippo Berio, the UK’s leading olive oil brand said: “Earlier in the year we were concerned that bulk prices would breach E3,000 per tonne. We are now at E4,400 per tonne and rising. These are the highest levels ever seen.”