Conditions are proving difficult on the olive oil market with prices rising on almost a daily basis.
The shortfall in Spanish production has resulted in very little stock in the Mediterranean. Greece and Italy have little or no oil left to sell, and estimates are that Spain has only between 500,000 and 550,000 tonnes.
Current domestic and export demand from Spain equates to around 100,000 tonnes per month, so stocks are only just sufficient to reach the new season in November.
As a result, Spanish producers holding stocks are unwilling to sell at present, preferring to wait as the price of olive oil continues to increase. As a result, Extra Virgin bulk prices have increased by over 10% with the prospect for further substantial rises between now and October.
The greatest increases have been seen in the Lampante and refined olive oils, which have increased by as much as 20%. Today Lampante is being quoted at virtually the same levels as Extra Virgin.
For the first time in many years, new season production will commence with little or no carryover stocks.
But prospects for the new season currently look positive with good flowering and setting of the trees in the main production areas of Greece, Italy and Spain. However, the lack of carryover stock will negate any tendency new pack prospects have to depress market prices and traders therefore expect a very firm market through to December.